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U.S.    CONGRESS.    SENATE.    COIiC^ITTEE    ON 
COm-'ERCE 

Promotion  and  maintenance  of  the  American 
merchant  marine 


UNIVERSITY  OF  CALIFORNIA 
AT    LOS  ANGELES 


I 


Calendar  No.  520. 

TH  Congress,  )  SENATE.  j        Report 

M  ^Session,     f  1       No.  573. 


C/.S .    e'o!  '^^Lc  ^.j  .    '-  -^  i-  .-r.  . ::    .       ^^<^ '-  '  ^f  ^  ''^'' ^   <^ '  1 


PROMOTION  AND  MAINTENANCE  OF  IT^^^VMERICAN 
MERCHANT  MARINE.     ^/^f., 

May  4,  1920.— Ordered  to  be  p1Snt(^.         ^/^  <^^  -^ 


^  -     •■  /Ob    *  %/ 


Mr.  Jones  of  Washington,  from  the  Committee  on  Com*clfcrce7Hub-      ' 
mitted   the   following  ^S 

REPORT. 

[To  accompany  H.  R.  10378.1 

The  Committee  on  Commerce,  to  whom  was  referred  the  bill  (H.  R. 
10378)  to  provide  for  the  promotion  and  maintenance  of  the  Ameri- 
can merchant  marine,  to  repeal  certain  emergency  legislation,  and 
provide  for  the  disposition,  regulation,  and  use  of  property  acquired 
thereunder,  and  for  other  purposes,  having  considered  the  same, 
report  it  with  an  amendment,  and  as  amended  recommend  its 
passage. 

For  many  years  the  amount  of  our  foreign  trade  carried  in  ships 
flying  our  flag  was  constantly  growing  less.  It  seemed  a  hopeless 
task  to  make  any  eftort  to  remedy  the  situation.  Everyone  was  in 
favor  of  an  adeciuate  American  merchant  marhie.  Political  plat- 
forms vied  with  each  other  in  declaring  for  an  American  merchant 
marine,  built  in  American  shipyards  by  American  labor,  manned 
by  American  seamen,  flying  the  American  flag  and  carrying  Ameri- 
can products  to  every  port  in  the  world.  This  sounded  flue,  but  it 
did  not  brhig  us  a  merchant  marine.  We  seemed  to  be  unable  to 
pass  any  effective  legislation,  and  when  the  World  War  began  less 
than  10  per  cent  of  our  foreign  trade  was  being  carried  in  American 
ships. 

The  Commerce  Committee  takes  it  for  granted  that  every  patriotic 
citizen  now  wishes  to  see  a  merchant  marine  under  the  American 
flag  large  enough  to  carry  the  major  part  of  our  own  foreign  trade 
and  such  part  of  the  world's  carrying  trade  as  may  be  commensurate 
with  our  wealth,  power,  and  standing  among  the  nations  of  the  world, 
and  that  whatever  is  necessary  to  bring  that  about  they  want  done. 
We  need  such  a  fleet,  not  only  for  our  commercial  growth  but  for 
the  Nation's  defense  in  time  of  war  and  tlie  stability  of  domestic 
industry  in  time  of  peace.  We  have  kept  before  us,  in  framing  the 
recommendations  we  make,  the  supreme  need  for  such  a  merchant 

/ 
45iG67 


2  PKOMOTIOX  AXD   MMXTENANCE  OF   THE  AMERICAlf   MARIN  x.. 

marine,  and  hare  not  pormittod  differences  over  details  to  divide 
us  upon  the  means  to  attain  this  end.  No  partisan  bias  has  had 
any  place  in  our  deliberations  and  what  we  submit  is  that  which  we 
as  patriotic  Americans  believe  will  attain  the  great  object  sought  by 
all. 

Xo  hiterests  but  American  interests  have  been  kept  in  view.  We 
are  sure  that  other  nations  will  look  after  their  citizens  and  their 
needs,  and  if  our  bushiess  is  to  be  cared  for,  we  must  do  it.  Years 
ago  our  great  commercial  rivals  said,  "To  hell  with  American  ships!" 
That  spirit  exists  to-day.  It  is  expressed  in  milder  terms,  but  with 
no  less  certainty.  Fair  Play,  the  great  shipping  organ,  of  London, 
said  a  short  tune  ago: 

Senator  Jones  and  otlier  enunoiators  of  golden  periods  must  clearly  understand  this, 
that  things  being  as  they  are,  so  far  as  Cfreat  Britain  is  concerned  there  can  be  no 
question  of  mutuality  of  sacrifice.  We  have  al\va>'s  been  generous  and.  in  the  matter 
of  or;'  interpretation  of  free  trade,  fools;  but  when  it  has  been  a  question  of  the  sur- 
Wval  of  the  fittest  we  have  invariably  done  our  level  best  to  crush  or  mold  opposition, 
and.  as  re'.:ards  America's  new  mercantile  marine,  we  shall  go  on  doing  it  and  expect 
her  to  do  the  same  by  us. 

This  is  what  we  must  meet.  We  are  going  to  meet  it  not  in  the 
spirit  of  destruction,  but  m  the  spirit  of  fair  pla}^  and  with  a  determi- 
nation to  secure  our  just  portion  of  the  world's  carrying  trade. 

The  nations  that  have  been  doing  the  ocean  carrying  trade  during 
the  last  50  years  are  not  going  to  give  it  up  ^nthout  a  liercc  struggle. 
They  arc  not  willing  for  us  to  do  a  fair  part.  They  know  the  business. 
They  have  the  ex})erience  and  the  business  facilities  and  connections 
throughout  the  world  that  give  them  a  great  advantage.  Govern- 
menttil  aid  and  power  will  be  coordinated  with  private  energy  and 
initiative  to  maintain  their  position,  and  must  be  met  in  the  same  wa^^ 

Nations  are  not  free  that  depend  upon  foreign  fleets  to  cany  their 
products  and  bring  to  them  their  supplies.  The  peace  of  the  world  is 
not  secure  so  long  as  one  nation  wholly  dominates  the  ocean  trade. 
We  do  not  seek  to  drive  other  nations  from  the  sea.  We  do  not  seek 
to  dominate  ocean  trade.  But  we  do  seek  to  do  a  just  and  proper 
part  of  it,  and  especially  of  our  own.  If  we  can  not  attain  this  end 
now  we  never  can  do  it.  No  halting,  hesitating,  doubting  policy  will 
succeed.  We  must  take  risks.  We  must  encourage  our  caj)ital  and 
energ)'  to  go  into  this  contest  and  assure  them  that  Ave  are  behind 
them  to  build  up  and  sustain  rather  than  tear  down.  With  this 
assurance  no  one  can  doubt  our  success. 

We  have  a  large  tonnagC  now.  This,  however,  does  not  make  a 
permanent  marine.  Steamship  lines  must  be  established  and  regidar, 
certain,  and  permanent  ser\ice  secured.  This  will  lead  to  the  estab- 
lishment of  commercial  agencies  and  the  creation  of  business  facilities 
which  we  do  not  now  have  but  whicli  are  necessary  to  success.  Worn- 
out  shij)s  nuist  be  replaced  with  new  ones.  More  elllcient  and  better 
types  of  vessels  must  be  built  to  take  on  important  services  for  which 
we  iiav(!  Tjo  vessels  now.  ( )ur  shipowners  and  ship  operators  must  be 
placed  as  nearly  as  possible  on  an  equality  in  operating  costs  and 
operating  conditions  with  their  competitors,  l^nless  i)roper  steps  are 
taken  to  do  these  things  it  will  be  but  a  short  time  until  our  licet  will 
be  (lissij)ated  and  our  Mag  <lriven  from  the  sea,  and  we  will  again  be 
in  the  same  dependent  and  humiliating  position  we  were  before  the 
war.  These  genei'al  considerations  hav(>  moved  the  committee  in 
determining  its  rejjort.     We  feel  conlident  that  if  our  recommenda- 


nq 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN   MARINE.         d 

tions  are  adopted  the  foundation  will  be  laid  upon  which  can  be  built 
a  policy  that  will  maintain  an  ample  American  merchant  marine 
under  the  American  flag  and  ultimately  in  private  owncrshij). 

We  take  the  Greene  bill  as  the  basis  of  our  rq)ort.  It  was  given 
long  and  careful  consideration  in  the  House.  It  dealt  solely  with 
thebaic  and  disposition  of  the  Government  ships,  the  House  com- 
mittee expecting  to  consider  and  deal  with  the  other  shipping 
problems  m  a  subsequent  measure.  Two  or  three  other  bills  liave 
passed  the  House  dealing  with  special  features  of  the  shipping 
problem,  and  several  of  these  measm-es  we  have  recommended  as 
anuMidments  to  the  Greene  bill.  Some  of  these  provisions  are  quite 
im])ortant  and  have  been  given  much  stud}'  bv  the  House  committee, 
and  we  feel  that  the  Merchant  Marine  and  iFisheries  Committee  of 
the  House  is  entitled  to  great  credit  for  what  it  has  done  on  this 
important  question.  H  the  sale  and  disposition  of  our  Government 
ships  were  the  only  problem  to  be  met  in  connection  with  the  mer- 
chant marine  the  "Greene  bill  might  well  be  passed  with  but  little, 
if  any,  amendment.  From  our  viewpoint,  however,  the  most  im- 
portant question,  and  the  most  difficult  one,  is  to  take  care  of  the 
fu  ture  of  our  merchant  marine  and  make  it  what  it  ought  to  be, 
Not  only  must  this  be  kept  in  view  in  the  disposal  of  our  ships,  but 
we  must  make  provision  so  that  they  can  be  operated  and  main- 
tained in  competition  with  the  world.  We  deem  it  wise  to  embody 
provisions  dealing  with  both  of  these  problems  in  one  bill. 

We  assert  the  need  of  a  merchant  marine  for  the  national  defense 
and  for  om'  commercial  growth  and  declare  it  to  be  our  policy  to 
do  whatever  may  be  necessary  to  meet  this  need. 

The  Shipping"^  Board  membership  is  made  seven  instead  of  five, 
the  salary  is  increased  to  $12,000  per  annum,  and  minor  changes  are 
made  with  reference  to  the  qualifications  of  the  members.  Success 
in  carrying  out  our  policies  will  depend  largely  upon  the  executive 
agency  intrusted  with  the  power  to  act.  The  Shipping  Board  is  the 
body  created  for  that  purpose.  It  was  provided  for  in  the  shipping 
act  of  1916  and  is  composed  of  five  members.  Thirteen  different 
persons  have  been  appointed  to  it  since  its  organization.  There  are 
three  members  serving  now.  For  one  of  the  two  vacancies  no  one 
has  been  named.  No  efficient  work  can  be  done — no  settled  adminis- 
trative policies  worked  out  or  carried  on — with  such  a  constantly 
changing  personnel.  The  law  provided  that  geography  should  be 
considered  in  selecting  the  members  of  the  board.  This  has  been 
wholly  disregarded.  This  should  not  be.  It  may  be  well  to  place 
^  some  restrictions  upon  the  private  interests  or  activities  of  members 
\  of  the  board,  but  we  should  have  men  upon  it  of  the  highest  business 
.^  character  and  the  widest  possible  experience,  and  their  interest  in 
^  shipping  should  be  taken  as  a  recommendation  rather  than  otherwise. 
^  We  should  have  men  on  the  Shipping  Board  who  know  the  shipping 
(  business,  who  can  meet  those  dealing  with  the  board  on  -their  own 
ground,  and  who  can  anticipate  the  moves  and  methods  of  our  com- 
petitors. Men  of  character  and  standing  can  be  depended  upon  to 
take  better  care  of  the  interests  of  the  Government  in  matters  with 
which  they  are  experienced  than  can  men  who  are  ignorant  of 
such  needs  and  without  such  experience.  There  is  more  danger 
of  loss,  injury,  or  failure  tlu-t>ugh  mistaken   action   than   tlu'ough 


4  PROMOTION   AND   MAINTENANCE  OF    THE  AMERICAN   MARINE. 

improper  action.  Every  important  section  of  the  country  should 
be  represented  on  tliis  great  board  and  men  of  standino;  and 
experience  in  shipping,  commerce,  agriculture,  labor,  and  industry, 
should  be  upon  it.  It  has  the  most  difficult,  as  well  as  the  most 
important  work  to  do.  Not  only  must  it  establish  and  carry  out 
great  administrative  policies  within  the  limits  prescribed  by  Congress, 
but  Congress  must  depend  upon  it  largely  for  recommendations  for 
leo-islative  action.  Tliis  board  will  make  or  mar  oiu-  merchant  marine. 
Not  only  should  it  be  composed  of  men  of  the  greatest  ability,  widest 
experience  and  highest  character,  but  these  men  should  give  their 
time  largely  to  the  study  of  policies  and  measures  that  will  enable 
our  shipping  interests  to  hold  their  own  with  those  of  other  nations. 
While  they  are  looking  after  the  disposal  of  our  ships  in  such  a  way 
as  to  care  for  the  future  they  should  be  studying  our  laws,  world  con- 
ditions, and  methods  of  competition,  so  that  they  can  aid  Congress  in 
doing  what  is  needed  to  secure  a  permanent  merchant  marine. 

The  sale  and  disposition  of  our  ships  must  necessarily  be  left  largely 
to  the  discretion  of  the  Shipping  Board.  We  have  endeavored  to 
indicate  clearly  the  administrative  policy  which  we  want  followed. 
Our  ships  are  owned  by  the  Government.  They  have  been  built 
with  the  people's  money.  They  are  the  people's  property.  Per- 
manent Government  ownership  and  operation  of  ships  is  less  to  be 
thought  of  than  Government  ownership  and  operation  of  railroads, 
and  should  not  be  adopted  as  a  permanent  policy  except  as  a  last 
resort.  We  have  Government  ownership  of  these  ships,  however, 
and  they  should  not  be  sold  at  bargain  prices  merely  to  get  them 
quickly  into  private  hands.  They  should  he  dealt  with  in  a  business- 
like way  and  dispose^  of  as  a  prudent  business  man  would  dispose  of 
such  property  as  he  does  not  desire  to  keep,  but  is  not  forced  to  sell. 
Tliis  we  have  tried  to  make  clear  by  the  amendments  which  we  pro- 
pose to  the  House  text.  With  foreign  competition  thoroughly 
organized  as  it  is  and  the  general  uiifamiliarity  of  our  people  with 
shipping,  and  with  our  lack  of  organized  facilities,  it  would  be  worse 
than  useless  to  dispose  of  these  ships  without  extending  every  aid 
possible  and  going  as  far  as  we  can  to  guarantee  their  maintenance 
in  the  W'Orld's  carrying  trade.  Speedy  and  injudicious  disposition 
of  our  ships  without  consideration  of  other  factors  would  likely  result 
in  a  repetition  of  that  fiasco  of  a  century  ago  when  inexperienced 
capital  was  attracted  to  the  shipping  business  in  time  of  unusual 
demand  and  soon  succumbed  when  comj^etition  became  keen.  Only 
with  the  Government  acting  as  a  buffer  in  this  era  of  reorganization 
of  our  merchant  marine  can  we  avoid  the  dissipation  of  our  present 
assets  and  return  our  Hag  with  security  to  the  commercial  seas. 

Several  provisions  are  recomnKMided  under  which  it  is  hoped  new 
and  up-to-date  ships  will  be  built,  desirable  lines  established  and 
regular,  certain,  and  peimaneiit  services  maintained.  This  is  essen- 
tial for  the  stability  of  our  fleet  and  the  <^rowth  of  our  commerce. 
We  can  take  our  ])roper  place  in  the  South  American  and  oriental 
trades  in  no  other  way. 

The  control  of  docks,  piers,  warehouses,  wharves,  and  terminal 
equi|)inent  and  faciliti(>s  acquired  during  the  war  have  been  ])lacod 
in  the  possession  and  under  llic  control  of  the  Sliij)ping  lioard. 
These  should  be  used  to  the  great  advantage  of  our  merchant  marine, 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN   MARINE.         0 

and  siiroly  no  at^cncy  of  the  Govornmont  can  better  })e  entrusted 
with  them  tlian  that  agency  whose  primary  duty  is  tlie  building  up 
of  the  merciiant  marine.  Ample  provision  for  their  use  l)y  tlie  Army 
and  the  Navy  is  nuide  in  case  of  need. 

The  transfer  of  ships,  whether  privately  or  Government  owned,  to 
aliens,  exce|)t  with  the  approval  of  the  Shipping  Board,  is  prohibited. 

TJie  board  is  to  determine  what  a])])rentices  sliould  be  carried  upon 
American  shi|)s,  and  while  this  will  l)e  only  atlvisory  so  far  as  ships  in 
private  ownershi]>  are  concerned  the  board  is  authorized  and  directed 
to  prescribe  the  number  and  require  the  carrying  of  aj)|:)rentices  on 
ships  sold  by  the  board,  on  shij)s  operated  by  the  board,  and  on 
shi|)s  having  contracts  for  the  carrying  of  the  mails.  This  is  very 
important,  especially  in  the  way  of  developing  and  training  men  to 
be  ollicers. 

Far-reaching  power  is  placed  in  the  Shipping  Board  to  make  and 
control  rules  and  regulations  affecting  shipping,  and  to  meet  foreign 
com)>etition.  We  must  do  something  of  this  kind,  if  we  would  meet 
the  practices  and  methods  of  other  countries.  Through  their  orders 
in  council  and  other  semilegislative  acts  of  administrative  bodies 
they  interfere  with  and  handicap  our  merchant  marine  in  many 
dift'erent  ways.  Tliis  must  be  met  in  a  similar  way.  Another  very 
desirable  and  necessary  thing  is  to  coordinate  the  rules  and  regula- 
tions issued  by  different  bureaus  and  departments  of  the  Government 
which  affect  our  merchant  marine.  They  should  in  general  be 
brought  under  one  control  and  made  to  harmonize  and  promote  the 
welfare  of  our  merchant  marine,  rather  than  handicap  it.  Tliis  can 
be  done,  and  we  hojic  will  be  done,  under  the  authority  we  have  given 
the  Shipping  Board. 

Sections  14  and  16  of  the  shipping  act  prohibit  rebates,  fighting 
ships,  retaliation,  unfair  and  unjustly  discriminatory  contracts,  undue 
preference,  and  otiier  unfair  practices,  but  no  adequate  provision  is 
made  for  preventing  such  things  being  done  by  foreign  carriers.  We 
have  made  provision  to  prevent  the  ships  of  companies  or  individuals 
engaging  in  such  methods  and  practices  from  entering  or  leaving  our 
ports.  This  will  go  a  long  way  toward  stopping  this  sort  of  com- 
petition. 

We  require  our  mails  to  be  carried  on  American  ships  wherever 
practicable.  We  are  now  spending  several  millions  of  dollars  a  year 
lor  the  transportation  of  United  States  mail  and  about  two-thirds  of 
this  money  is  being  paid  to  foreign  ships.  This  is  notliing  more  nor 
less  than  a  direct  subsidy  to  them  and  should  cease. 

We  hope  to  develop  and  build  up  an  American  Bureau  of  Shipping 
that  will  be  an  American  Lloyds  and  eventually  have  the  standing  in 
the  world's  shipping  that  the  great  English  agency  has  to-day. 
Lloyds  agency  is  one  of  the  great  factors  in  the  maintenance  of  the 
British  merchant  marine,  and  we  should  have  an  American  agency  of 
that  kind  of  equal  ])otency  in  the  shipping  world. 

Under  the  law  now  preference  or  lower  rates  can  be  made  on  rail- 
roads upon  products  for  import  or  export,  whether  carried  in  American 
or  alien  ships.  We  provide  that  this  preference  or  lower  rate  can  be 
given  on  railroads  only,  except  under  certain  conditions,  when  the 
goods  are  ex])orted  or  imported  in  American  ships.  This  is  a  prac- 
tice followed  by  other  countries  and  it  can  be  and  should  be  followed 


6  PEOMOTIOX  AXD  MAINTENANCE  OF    THE  AMERICAN   MARINE. 

most  offectively  by  us.     The  Shipping  Board  urges  this  strongly  in 
the  following  letters  and  memorandum: 

United  States  Shipping  Board, 

Washington,  April  19,  1920. 
Hon.  W.  L.  Jones, 

Chairman  Commerce  Committee.    United  Slafes  Senate. 

My  Dear  Senator:  It  is  the  undoubted  desire  of  Congi'ess  to  legislate  in  whatever 
manner  will  insure  the  success  of  the  United  States  merchant  marine.  It  is  the 
expressed  fear  of  American  operators  and  the  boast  of  foreign  operators  that  with  a 
return  to  normal  conditions,  the  American  fleet  will  be  tied  up  in  ports  unable,  by 
reason  of  its  greater  initial  cost  and  its  greater  operating  cost,  inch.sive  of  labor,  to 
compete  with  the  vessels  of  other  flags. 

Other  nations  have,  by  direct  subsidy,  guaranteed  the  operation  of  their  fleets  in 
world  competition.  We  believe  it  unnecessary  for  the  United  States  to  adopt  a  like 
policy.  If  we  can  confine  to  vessels  of  the  United  States  an  existing  advantage  now 
guaranteed  by  United  States  statutes  to  vessels  of  all  nations,  it  will  be  entirely  pos- 
sible for  our  fleet,  notAvithstanding  the  handicaps  of  labor  or  of  capital  investment, 
to  permanently  sail  the  seas  with  the  commerce  of  the  United  States. 

By  legislating  to  that  end,  we  but  follow  policies  which  adopted  by  other  nations 
guaranteed  their  success  in  the  carrying  of  their  own  commerce.  If  we  can  but 
handle  the  foreign  commerce  of  the  Ignited  States,  or  a  considerable  portion  thereof, 
in  vessels  of  the  United  States,  it  will  be  ample  to  insure  the  success  of  a  fleet  larger 
than  that  we  now  possess. 

It  was  by  such  measures  that  Germany  guaranteed  60  per  cent  of  its  exports  and  50 
per  cent  of  its  imports  in  German  vessels.  By  like  policy  Japan  prevented  even 
American  transcontiental  railroads  owning  shi])s  from  successfully  operating  them 
across  the  Paciiic  in  competition  with  vessels  of  Japan,  making  it  necessary  for  such 
transcontinental  roads  to  enter  into  contracts  with  Japanese  carriers  and  give  to  vessels 
of  such  carrier  freight,  which,  if  carried  by  their  own  American  vessels,  would  have 
insured  their  success.  The  protection  referred  to  is  that  of  restricting  the  preferential 
rail  rates  within  the  country,  known  as  "export"  and  "import"  rates,  to  the  vessels 
of  the  flag  of  such  country.  We  therefore  strongly  recommend  the  enactment  in 
the  merchant-marine  legislation,  now  before  the  committee,  of  the  following  sec- 
tion, with  full  knowledge  that  like  discrimination  by  other  nations  still  leaves  to 
vessels  of  the  United  States  an  80  per  cent  advantage. 

(The  amendment  proj^osed  is  here  omitted  as  it  is  incorporated  in  the  bill.) 
Yours,  very  truly, 

W.  S.  Benson,  Chairman. 

United  States  Shipping  Board, 

Washington,  April  27,  1920. 
Hon.  W.  L.  Jones, 

United  States  Senate. 
My  Dear  Senator:  Referring  to  the  two  letters  of  April  19  from  Admiral  Benson 
to  yotirself,  recommending  certain  amendments  to  the  merchant  marine  bill,  I  beg 
to  inclose  herewith  a  memorandum  giving  in  greater  detail  some  of  the  reasons  and 
arguments  for  such  legislation  and  which  may  be  of  use  to  you  in  connection  with 
presentation  of  the  merits  of  these  amendments  before  the  committee  and  the  Senate. 
\'ery  sincerely,  yours, 

R.  A.  Dean,  General  Counsel. 

The  United  States  now  owns  approximately  2,000  merchant  vessels,  of  which  1,149 
are  a  desirable  type  of  steel  vessels,  aggregating  in  round  numbers  7,000,000  ton'^.  In 
its  operation  this  fleet  constitutes  the  greatest  commercial  enterprise  in  the  world,  an 
enterprise  which  must  inevitably  result  in  unparalleled  success  or  most  colossal  failure. 
Its  destinies  lie  with  Congress,  and  whether  Government  owned  and  operated  or  trans- 
ferred to  priv^ate  ownership  for  operation  by  American  citi/.ens,  it  is  absolutely  essen- 
tial tliat  Congress  establish  by  law  policies  whic-li  will  insure  that  these  vessels  of  the 
United  States  shall  be  successful  in  tluur  competition  witli  vessels  of  other  nations, 
at  loa.st  for  the  commcirce  afforded  by  Tnited  States  markets. 

Ah  matters  now  stand,  tliis  Ih^'t  represents  an  iinestinent  per  registered  ton  far 
greater  than  like  investment  in  the  vessels  of  any  other  nation.  The  costs  of  operation 
un<h'r  corifiitions  .such  as  ol)tain  for  the  I'nited  States  lieet  are  far  greater  than  for  other 
nation.s.  It  is  imperative  that  ('ongress  by  proper  enactment  i)rovide  for  vessels  of 
thci  Cnitc'd  States,  when  owned  by  American  citizens,  an  artilicial  advantage  which 
will  in  a  measure  offset  the.se  stated  and  other  adverse  conditions,  and  so  insure  the 
continued  successful  operation  of  United  States  vessels  in  competition  with  the  world 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE.         7 

at  large.  To  aoconiplish  this  requires  no  subsidy;  only  a  proper  protection  for  Ameri- 
can vessels  in  the  enjoyment  of  our  own  water-borne  commerce,  on  the  following  lines: 

Coastinq  tradcx  of  (he  United  Slates. — No  vessels  should  be  jiermitted  operation  in 
the  coastin<r  trades  of  the  United  States  unless  it  shall  at  all  times  be  wholly  owned  by 
citizens  of  the  Ignited  States  as  to  the  value  of  all  sec\irities  issued  ap;ainst  it. 

Except  as  to  certain  foreitjn-built  ships  heretofore  admitted  to  United  States  registry 
under  7)rovisions  of  law,  or  vessels  now  owned  by  the  United  States,  tiie  coasting  privi- 
lege should  be  absolutely  confined  to  vessels  built  in  the  United  States. 

Such  policy  obtained  from  the  foundation  of  our  (Jovcrnment  until  very  recent 
years,  and  under  that  policy  we  became  possessed  of  a  tonnage  in  vessels  greater  than 
the  combined  coastwise  fleets  of  the  leading  maritime  nations  of  the  world.  In  1914 
we  were  rated  the  .second  maritime  nation  of  the  world,  our  tonnage  in  seagoing  ships 
being  exceeded  only  by  that  of  (ireat  Uritian. 

Hxcept  for  the  American-built  seagoing  tonnage  developed  und^r  that  policy, 
we  would  ha\e  been  in  sorry  plight  at  the  time  of  our  entrance  into  the  World  War. 
However,  influences  adverse  to  the  interests  of  the  I'nited  States  have  accomplished 
relaxation  of  statutory  reouirements,  and  of  interpretation  of  statutes  contrary  to 
the  intent  of  Congress  in  their  enactment,  resulting  in  many  encroachments  upon 
the  theretofore  purely  American  occupation  of  our  coasting  trades,  so  that — 

(a)  Vessels  under  foreign  lings  have  since  Utl.3  (not  through  the  medium  of  the 
emergency  war  legislation  of  1917)  participated  in  the  carrying  of  domestic  commerce 
from  one  to  another  point  in  the  United  States,  including  carriage  of  domestic  com- 
merce from  coast  to  coast  through  the  Panama  Canal. 

(6)  Subjects  of  foreign  (lovernments,  and  even  foreign  Governments  themselves, 
now  own  and  operate  vessels  of  the  Ignited  States  in  our  domestic  coasting  trades. 
This  is  accomplished  through  the  medium  of  corporations  of  the  United  States,  the 
actual  ownership  of  all  or  a  majority  of  the  securities  of  which  are  vested  in  foreign 
subjects,  so  that  the  corporations  are  in  fact  but  "dummies,"  ostensibly  held  by 
American  citizens  but  in  reality  a  "camouflage"'  to  the  foreign  ownership. 

Unless  our  coasting  fleet  be  wholly  and  unequivocally  owned  by  loyal  American 
citizens,  it  can  not  be  rated  a  dependable  unit  in  time  of  national  emergenc\.  We 
must  insure  that  it  w'U  always  be  dependable  by  repairinsj  the  breaches  njade  in  our 
coasting  laws  so  that  100  per  cent  bona  tide  American  ownership  shall  be  the  only  key 
to  our  coasting  trades. 

That  is  ostensibly  the  present  requirement  from  individual  owners  in  both  coasting 
and  foreign  trades  of  the  United  States,  and  it  is  through  the  corporation  or  association 
holding  American  tonnage  that  the  door  is  opened  to  foreigners. 

The  requirement  in  respect  of  corporations,  partnerships,  or  associations  is  that  a 
control  of  such  corporations,  partnerships,  or  associations  shall  be  vested  in  citizens 
of  the  United  States.  It  may  be  expedient,  so  far  as  the  foreign  trades  are  concerned, 
that  foreign  capital  be  admitted  in  the  ownership  of  ve.'^sels  in  such  trades:  but  if  so, 
Buch  ownership  l)y  foreigners  should  not  be  permitted  beyond  25  per  cent  of  the  total 
value  of  all  the  securities  of  such  shipping  organization. 

Only  by  such  provisions  can  the  United  States  realize  benefits  from  its  shipping 
akin  to  that  which  the  British  Government  described  as  "Great  Britain's  invisilple 
exports,"  viz,  the  returns  to  Great  Britain  of  the  receipts  from  the  operation  of  its 
British-owned  merchant  marine,  of  a  sum  sufliciently  great  to  not  only  compensate 
for  the  excess  of  Britain's  imports  over  exports,  but  to  insure  an  additional  balance 
in  favor  of  Britain,  sufliciently  large  to  have  always  forced  the  flow  of  gold  from  other 
nations  to  Britain,  estaldishing  London  as  the  money  center  of  the  world. 

Before  the  war  England  was  sea  carrier  for  all  nations  and  owned  half  the  merchant 
tonnage  of  the  world.  Unless  we  are  ■\\T.lling  to  insist  on  citizen  ownership  of  Amer- 
ican vessels,  and  protect  such  citizens  in  the  world's  trades,  we  can  not  successfully 
compete  with  Britain  even  for  the  export  and  import  commerce  of  our  own  country. 

Foreign  trades. — No  nation  ever  grew  to  maritime  ])rominence  without  artificial 
protection.  This  can  be  successfully  accomplished  for  the  American  merchant 
marine  without  subsidy. 

The  fact  that  we  suddenly  find  ourselves  with  a  merchant  marine  almost  equaling 
that  of  Great  Britain  does  not  justify  the  belief  that  we  shall,  without  artificially 
created  advantage,  be  able  to  hold  to  our  fleets  even  a  considerable  part  of  the  com- 
merce of  the  United  States.  If  our  merchant  marine  is  to  be  successful,  that  .success 
must  be  guaranteed  by  our  water-borne  domestic  and  foreign  commerce.  In  such 
enactment  we  would  but  follow  the  illustroiis  example  of  Cireat  Britain  which  until 
1854  (when  its  fleet  had  been  dcvelo]ied  to  magnificent  proportions)  prohibited  the 
vessels  of  all  other  nations  from  importing  into  the  Ignited  Kingdom,  or  any  British 
possession  in  Asia,  Australia,  or  America,  any  good  unless  such  goods  were  the  product 
of  the  coimtry  to  which  such  vessel  belonged,  and  were  imported  directly  from  the 
country  of  origin.  Foreign  vessels  were  also  ab.solutely  excluded  not  only  from  the 
coasting  trades  of  the  United  Kingdom  but  from  interimperial  trades  as  well. 


8  PROMOTION   AXD  MAINTENANCE  OF    THE  AMERICAN  MARINE. 

There  was  no  relaxation  of  these  regulation  until  the  growinc;  necessitie?  of  Britain 
for  commercial  expansion  by  sea  made  it  seem  desirable  to  relax  in  a  measure  these 
provisions,  as  a  basis  of  securing  further  advantage  for  its  fleet  in  the  exclusive  trades 
of  other  nations.  > 

Prior  to  1860.  the  United  States,  possessed  of  a  Adgorous  foreign  policy,  never  carried 
in  its  fleet  less  than  from  50  to  60  per  cent  of  our  own  foreign  commerce.  Just  before 
the  World  War,  to  our  shame,  we  carried  of  that  commerce  less  than  10  per  cent. 
Foreign  carriers  handled  more  than  90  per  cent  of  our  trades,  and  50  per  cent  of  our 
total  commerce  was  exported  or  imported  in  vessels  of  Great  Britain.  We  supplied 
noarlv  three-fourths  in  weight  and  over  60  per  cent  in  value  of  the  Brtish  Empire's 
imports  from  countries  outside  of  Europe,  and  furnished  market  for  approximately  40 
per  cent  of  the  Empire's  exports  to  countries  outside  of  Europe,  ilore  than  one-half 
of  the  British  tonnage  engaged  in  ocean  trades  traded  with  America. 

AVe  have  in  striking  contrast  with  our  failure  in  that  direction,  the  successes  of  both 
Germany  and  Japan  in  building  and  holding  their  own  sea  trades  against  encroach- 
ment by  vessels  of  any  other  nation.  The  successes  of  each  of  these  countries  in  the 
development  of  shipping  in  foreign  commerce  is  mainly  due,  a])art  from  any  subsidy, 
to  the  wise  policy  of  gi^'ing  special  advantages  to  their  vessels,  tlirough  the  medium  of 
preferential  rail  freight  rales,  apphdng  only  to  exports  and  imports  when  handled  in 
■vessels  of  the  home  flag  of  such  countries. 

In  Germany  this  method  resulted  in  German  vessels  enjoying  the  carriage  of  60 
per  cent  of  the  volume  of  that  country's  exports  and  over  50  per  cent  of  the  volume  of 
that  country's  imports. 

In  Japan  this  provision  which,  according  to  informed  shipowners  on  the  Pacific 
lias  obtained  for  a  period  of  20  years  or  more,  has  given  to  the  vessels  of  Japan  ascend- 
ency over  vessels  of  Britain,  the  United  States,  and  of  all  other  countries,  in  the 
carr\ing  trades  of  the  Pacific. 

Mr.  James  J.  Hill,  with  all  of  the  leverage  resultant  from  the  control  by  a  trans- 
continental railroad  of  freight  for  trans-Pacific  destinations,  found  it  impracticable 
to  operate  his  o^vn  American-documented  vessels  from  the  United  States  to  Japan  in 
competition  with  the  vessels  of  Japan,  because  of  the  preferential  rail  rate  in  Japan 
upon  the  .freight  carried  in  Japanese  vessels,  and  was  obliged,  as  a  protection  to  his 
rail  interests  in. the  United  States,  to  enter  into  contract  with  a  Japanese  carrier  and 
to  give  to  the  vessels  of  that  can'ier  freight,  the  carriage  of  which  would  have  insured 
the  success  of  his  own  American  trans-Pacific  service. 

The  Hill  service,  by  United  States  vessels,  was  eventually  and  necessarily  with- 
draAvn  from  the  trans-Pacific  competition,  and  so  were  all  other  American  documented 
carriers  long  prior  to  the  outbreak  of  the  war. 

The  ad\antage  to  German  ships  from  like  practice  in  German}''  was  so  great  that 
together  vdth  the  other  advantages,  such  as  the  passenger-control  system,  it  gave  to 
German  steamshij)  companies  the  dominating  influence  in  prewar  European  vessel 
conferences.  Furthermore,  it  is  admitted  by  Britain  to  be  an  advantage  which  they 
could  not  overcome,  an  advantage  however  the  elimination  of  which  could  not,  in 
the  opinion  of  that  goA-ernment,  be  made  the  subject  of  special  treaty  provision. 

We  can  insure  the  success  of  American  shipping  in  the  foreign  trades  by  adopting 
the  present  practices  of  Japan,  the  practice  of  Germany  during  the  entire  period 
when  tliat  nation  owned  a  merchant  marine,  viz.  establishing  that  the  preferential 
rail-freight  rate  on  export  and  import  freight  in  the  United  States  rail  carriers,  now 
given  indiscriminately  to  the  ve.'^sels  of  all  nations  for  the  purpose  of  balancing  rail 
traffic,  shall  a])])ly  only  to  vessels  of  the  United  States. 

Such  provision  of  flag  advantage  for  American  vessels  is  not  a  contravention  of 
the  most  favored  nation  clauses  of  any  treaties.  Unlike  discriminating  duties  which 
are  the  subject  of  treaties  with  many  nations,  we  are  as  free  to  establish  this  advantage 
for  American  .shipping  as  we  are  to  establish  an  import  duty  upon  any  commodity 
imported  into  the  United  States. 

I  point  to  a  single  example,  imder  such  provision  of  law,  of  advantage  to  American 
shipping  as  engaged  in  oriental  trades  from  the  Pacific  coast. 

The  domestic  rate  to  the  Pacific  coast  on  steel  is  !S1.25,  whereas  the  export  rate  to  the 
Pacific  is  60  cents  per  hundred  pounds.  This  represents  a  differential  which  would, 
under  such  provision  of  law,  accrue  to  an  American  ship  as  against  a  competitor  by 
any  other  nation,  of  $14. .50  per  long  ton  of  steel. 

It  may  be  argued  that  if  we  were  to  enact  such  provision,  other  nations  would  dis- 
criminate in  like  manner.  We  suggest  this  enactment  in  so  far  as  Ja])an  is  concerned 
would  but  counteract  existing  like  discriminations  by  that  coimtry  against  our  own 
vessels. 

The  average  rail  liaul  in  the  United  States  for  export  or  import  freight  from  either 
coast  i.s  so  much  greater  than  the  average  rail  haul  in  any  foreign  country  as  to  leave 
to  the  United  States  under  like  discrimination  an  advantage  of  approximately  80 
per  cent. 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN   MARINE.  9 

In  this  connection  British  shipowners  have  been  warned  l)y  the  British  Govern- 
ment that  they  must  not  expect  either  natural  or  artificial  advantaj^es  in  countries 
wliere  the  markets  are  not  BritLsh,  and  have  lieen  pointed  this  moral  with  reference 
to  onr  own  mnrkets. 

It  is  little  .'<hort  of  camouflas^e  to  discuss  the  desirability  of  possessing  a  great  mer- 
chant marine  under  the  American  flag,  imlcss.  regardle-!S  of  protests  from  foreign 
nations  or  from  individuals  within  the  United  States  more  interested  in  foreign  nations 
than  our  own,  we  are  willing  to  legislate  in  such  manner  as  shall  give  to  our  "lustry 
infant  merchant  marine"  an  advantage  in  trade  which  will  permit  it  contiiuied 
exist'i'nce. 

These  provisions  do  not  in  any  manner  interfere  with  the  mo\-ement  through 
Canada  and  over  Canadian  rail  lines,  at  any  rate  they  may  choose  to  establish,  of 
merchandise  in  export  or  import  from  the  United  States  or  moving  l)etween  points 
in  the  I'nitcd  Sfiti's  tlirough  Canada.  So  far  as  the  domestic  trades  are  concerned 
it  simply  reestal)lislies  conditions  as  they  existed  from  the  beginning  of  our  Govern- 
ment down  to  and  including  the  year  1912. 

Under  certain  conditions  we  relieve  marine  insurance  associations 
or  companies  from  the  restrictions" of  the  antitrust  laAvs.  We  believe 
that  the  interests  of  our  country  are  fully  protected  by  the  limitations 
placed  upon  these  associations,  and  if  we  can  develop  marine  insur- 
ance as  it  shoidd  be  developed  in  this  country  we  can  do  nothing 
better  for  an  American  marine.  Only  about  10  per  cent  of  our  hull 
insurance  and  only  al)out  25  or  30  per  cent  of  all  kinds  of  our  marine 
insurance  are  done  to-day  by  American  companies. 

^Mortgage  security  on  ships  now  is  practically  worthless.  We 
make  it  good  except  as  to  certain  demands  that  should  be  superior 
to  everything  else,  such  as  wages.  W^e  want  our  people  and  capital 
interested  in  shipping  and  shipping  securities.  If  we  can  bring  this 
about  one  of  the  greatest  problems  of  our  merchant  marine  will  be 
solved.  The  Engtish  people  are  financially  interested  in  their  ship- 
ping.    We  must  have  our  people  interested  in  ours. 

For  many  years  the  United  States  has  been  prevented  from  doing 
what  was  clearly  to  its  advantage  to  do  in  order  to  build  up  the  mer- 
chant marine  by  restrictions  imposed  upon  it  through  commercial 
treaties.  There  can  be  no  more  opportune  time  to  abrogate  these 
treaties  and  make  new  commercial  arrangements,  if  they  are  deemed 
desirable,  than  now.  France  has  already  notified  us  of  her  desire 
to  abrogate  her  treaty  with  us,  and  we  should  put  ourselves  in  a 
position  where  we  can  do  whatever  we  deem  necessary  to  promote 
our  commercial  or  marine  welfare.  We  may  not  desire  to  go  back  to 
the  policy  of  the  fathers  under  which  our  ships  were  our  Nation's 
pride,  but  we  ought  to  be  free  to  do  it  if  we  want  to.  We  have  made 
provision  for  this  by  directing  the  President  to  give  the  notice  neces- 
sarv  to  abrogate  such  treaties. 

We  require  our  coastwise  shipping  to  be  wholly  owned  by  Americans 
and  our  shipping  in  the  foreign  trade  to  be  at  least  three-fourths 
owned  by  Americans.  This  is  strongly  urged  by  the  Shipping  Board 
in  the  following  letter: 

United  States  Shipping  Board, 

Washiyigton,  April  19,  1920. 
Hon.  W.  L.  Jones, 

Chairman  Commerce  Comviittte,  Uniled  States  Senate. 
My  Deau  Senator:  I  have  the  following  suggested  amendments  to  the  second 
committee  print  of  the  merchant  marine  act  of  1920: 

1.  Believing  that  it  is  essential  that  our  coasting  fleet  be  wholly  owned  by  American 
citizens,  I  respectfully  suggest  that  section  29  of  the  second  committee  print  be 
amended  by  inserting  after  the  word  "act,"  in  line  11,  on  page  26,  the  words  "and 
wholly  owned  by  citizens  of  the  United  States."  Section  29  as  so  amended  should  be 
enacted,  as  I  deem  the  same  vital  for  the  preservation  of  our  maritime  security. 


10       PROMOTIOI^  AI^i3  MAINTENAIS^CE  OF   THE  AMERICAN   MARINE. 

2.  As  a  corollarv  to  the  suggestion  contained  in  paragraph  1,  it  follows  that  "citizen- 
ship" in  the  "Shipping  Board  act,  1916,"  should  be  redefined,  aud  I  submit  the  fol- 
lowing. It  \\'ill  be  noted  that  at  the  end  of  this  substituted  section,  a  pro\ision  is 
made  for  foreign  commerce  which  may  be  deemed  necessary  during  the  period  of 
transition  • 

"That  section  2  of  the  shipping  act  of  1916  be  and  the  same  is  hereby  amended  to 
read  as  follows: 

'"gp-c  —  That  within  the  meaning  of  this  act  no  corporation,  partnership,  or 
association  shall  be  deemed  a  "citizen  of  the  United  States"  unless  all  of  the  securi- 
ties of  such  corporation,  partnership,  or  association  are  at  all  times  wholly  and  bona 
fide  ownied  by  citizens  of  the  United  States,  and  in  the  case  of  a  corporation,  unless 
in  addition  to  such  requirement,  its  president  and  directors  are  citizensof  the  United 
States,  and  the  corporation  itself  is  organized  under  the  laws  of  the  United  States,  or 
of  a  State,  Territory,  District,  or  possession  thereof. 

"  'A  corporation  "shall  not  be  deemed  to  be  so  owned  by  citizens  of  the  United 
States  (a)  if  the  title  to  all  of  the  value  of  its  stock  and  other  securities  is  not  vested 
in  such  citizens,  free  from  any  trust  or  fiduciary  ol)ligation  in  favor  of  any  person  not 
a  citizen  of  the  United  States";  or  (b)  if  all  the  voting  power  in  such  corporation  is  not 
vested  in  citizens  of  the  United  States;  or  (c)  if,  through  any  contract  or  uiider- 
etanding,  it  is  so  arranged  that  voting  power  in  such  corporation  may  be  exercised, 
directly  or  indirectly,  in  behalf  of  any  person  who  is  not  a  citizen  of  tlie  United  States; 
or  (d)  if  by  any  other  means  whatsoever  control  of  any  interest  in  the  corporation  is 
conferred  upon  or  permitted  to  be  exercised  by  any  person  who  is  not  a  citizen  of  the 
United  States:  Provided,  however,  That  for  the  purpose  of  operating  vessels  exclu- 
sively in  commerce  with  foreign  nations,  a  corporation,  partnership,  or  association 
organized  and  officered  as  provided  in  this  section  shall  be  deemed  a  citizen  of  the 
United  States  if  at  least  75  per  cent  of  the  value  of  all  the  securities  of  such  corpora- 
tion, partnership,  or  association  are  at  all  times  bona  lide  owned  l;y  citizens  of  the 
United  States,  free  from  any  trust  or  fiduciary  obligation  in  favor  of  any  person  not 
a  citizen  of  the  United  States. '  " 

Unless  our  coasting  fleet  be  wholly  and  unequivocally  owned  by  loyal  United 
States  » itizens,  it  can  not  be  rated  a  dependable  unit  in  time  of  national  emergency. 
Such  dependability  must  always  be  insured,  and  this  can  only  be  accomplished  by 
making  100  per  cent  bona  fide  American  ownership  the  only  key  to  our  coasting  trade, 
and  inso  far  as  consistent  with  present  conditions,  to  establish  the  same  requirement 
for  our  foreign  commerce. 
Yours,  very  truly, 

W.  S.  Benson,  Chairman. 

These  are  some  of  the  main  provisions  of  the  House  bill  with  the 
amendments  we  propose.  '  It  is  not  a  perfect  measure,  but  it  is  a 
purely  patriotic  attempt  to  do  what  the  people  of  this  country, 
without  regard  to  occupation,  party,  or  section,  want  done.  A 
great  responsibility  is  placed  upon  the  Shipping  Board.  This  we 
can  not  avoid.  If  the  men  who  compose  that  board  are  tlie  right 
kind  of  men  and  moved  by  the  right  spirit  they  wiU  do  a  great  work 
for  their  country  and  bring  immortal  fame  to  themselves. 

The  following  is  the  text  of  the  bill  with  the  amendments  we  pro- 
pose incorporated  therein: 

[H.  R.  10378,  Sixty-sixth  Congress,  first  session.] 

AN  ACT  To  provide  for  the  promotion  and  maintenance  of  the  American  merchant  marine,  to  repeal 
certain  emergency  legislation,  and  provide  for  the  disposition,  regulation,  and  use  of  property  acquired 
thereunder,  and  for  other  purposes. 

Be  it  enacted  hj  the  Senate  and  Bouse  of  Representatives  of  the  United  States  of  America 
in  Congress  assembled,  That  it  is  necessary  for  the  national  defense  and  for  the  proper 
gro^vth  of  its  foreign  and  domestic  covrmerre  that  the  United  Stales  shall  have  a  merchant 
marine  of  the  best  equipped  and  most  siritable  Igpes  of  vessels  sufficient  to  carry  the  greater 
portion  of  its  commerce  and  serve  as  a  naval  or  military  auxiliary  in  time  of  tear  or  national 
emergency,  vltviualely  to  be  owned  and  operated  privately  by  citizens  of  the  United  States; 
and  it  is  hereby  declared  to  be  the  policy  of  the  United  States  to  do  whatever  may  be  nec- 
essary to  develop  and  enconrnge  the  maintenance  of  such  a  merchant  marine,  and,  insofar 
as  may  not  be  inconsistent  with  the  express  provisions  of  this  Act,  the  United  States  Ship- 
ping hoard  shall,  in  the  disposition  of  vessels  and  shipping  property  as  hereinafter  pro- 
vided, in  the  making  of  rules  and  regulations,  and  in  the  administration  of  the  shipping 
laws  keep  always  in  view  this  purpose  and  object  as  the  primary  end  to  be  attained. 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE,       11 

Sec.  2.  (a)  That  the  following  Acts  and  parts  of  Acts  are  hereby  repealed,  subject 
to  the  limitations  and  exceptions  hereinafter,  in  this  section,  provided: 

(1)  The  enierconcy  shippini^  fund  jjrovisions  of  the  Act  entitled  "An  Act  making 
appropriations  to  supjily  urgent  deficiencies  in  appropriations  for  the  ^fiiitary  and 
Naval  Establislunents  on  account  of  war  expenses  for  the  fiscal  year  ending  June  30, 
1917.  and  for  other  pin-po«es,"  approved  June  15,  1917,  as  amended  by  the  Act  en- 
titled "An  Act  to  aii  t'lul  luc  Ciuergcncy  shi]jping  fund  provisions  of  the  ['rgent 
jjeliciency  Appropriation  Act,  approved  June  15,  l!)17,  so  as  to  empower  the  Presi- 
dent and  his  designated  agents  to  take  over  certain  transi)ortntion  systems  for  the 
transportation  of  shipyard  and  plant  employees,  and  for  other  purjjoses,"  a])proved 
April  22,  19iS,  and  as  further  amended  by  the  Act  entitled  "An  Act  making  aj^pro- 
priation  to  svipply  deficiencies  in  appropriations  for  the  fiscal  year  ending  June  30, 
1919,  and  prior  I'iscal  years,  on  account  of  war  expenses,  and  for  other  purposes," 
approved  November  4,  1918; 

(2)  Section  3  of  such  Act  of  April  22,  191S; 

(3)  Tlie  paragraphs  numbered  2  and  3  under  the  heading  "Emergency  shipping 
fund"  in  s^uch  Act  of  November  4,  1918;  and 

(1 )  The  Act  entitled  "An  Act  to  confer  on  the  President  power  to  prescribe  charter 
rat<'s  and  freight  rates  and  to  requisition  vessels,  and  for  other  purposes,"  approved 
Julv  18.  1918. 

(5)  Sections  5,  7,  and  F,  Shipping  Act,  19T6. 

(b)  The  repeal  of  such  Acts  or  parts  of  Acts  is  subject  to  the  following  limitations: 

( 1)  All  contracts  or  agreements  lawfully  entered  into  before  the  passage  of  this 
Act  under  any  such  Act  or. part  of  Act  shall  be  assumed  and  carried  out  by  the 
United  States  Shipping  Board,  hereinafter  called  "the  board." 

(2)  All  rights,  interests,  or  remedies  accruing  or  to  accrue  as  a  result  of  any  such 
coHtract  or  agreement  or  of  any  action  taken  in  pursuance  of  any  such  Act  or  paf* 
varls  of  A-e4^  Acts  shall  be  in  all  respects  as  valid,  and  may  be  exercised  and  enforced 
in  like  mannt>r,  suliject  to  the  provisions  of  subdivision  (c)  of  this  section,  as  if  this 
Act  had  not  Ijeen  passed; 

(3)  The  repeal  shall  not  have  the  effect  of  extinguishing  any  penalty  incurred 
under  such  tAet  Acts  or  part  parts  of  Act,  whieh  Acts,  but  such  Acts  or  parts  of  Acts 
shall  remain  in  force  for  the  purpose  of  sustaining  a  prosecution  for  the  enforcement 
of  such  the  penalty  thf  rein  provided  for  the  violation  thereof. 

(4)  The  board  shall  have  full  power  and  authoritj/  to  complete  or  conclude  any  con- 
struction tvork  begun  in  accordance  with  the  provisions  of  such  Acts  or  parts  of  Acts  if, 
in  the  opinion  of  the  hoard,  the  completion  or  conclusion  thereof  is  for  the  "best  interests  of 
the  United  States. 

(c)  As  soon  as  practicable  after  the  passage  of  this  Act  the  board  shall  adjust, 
settle,  and  liquidate  all  matters  arising  out  of  or  incident  to  the  exercise  by  or  through 
the  President  of  any  of  the  powers  or  duties  conferred  or  imposed  upon  the  President 
by  any  such  Act  or  part  parts  of  Aet  Acts;  and  for  this  purpose  the  board,  instead  of 
the  President,  shall  have  and  exercise  any  of  such  powers  and  duties  relating  to  the 
determination  and  payment  of  just  compensation;  Prorieled.  That  any  person  dissatis- 
fied trith  any  decisioJi  of  the  board  shall  have  the  same  right  to  sue  the  United  States  as  he 
tvould  have  had  if  the  decision  had  been  made  by  the  President  of  the  United  States  under 
the  Acts  hen  by  repealed. 

Sec.  3.  That  section  3  of  the  "Shipping  Act,  1916"  is  amended  to  read  asfolloius: 
''Sec.  3.  That  a  hoard  is  hereby  created,  to  he  hnovn  as  the  United  Stales  Shipping 
Board,  and  hereinafter  referred  to  as  the  hoard.  The  board  shall  he  composed  of  seven 
commissioners,  to  be  appointed  by  the  President,  by  and  ivith  the  advice  and  consent  of  the 
Senate;  and  the  President  shall  designate  the  member  to  act  as  chairman  of  the  board,  and 
the  hoard  may  elect  one  of  its  members  as  vice  chairman.  Such  coniviissioiiers  shall  he 
appointed  as  soon  as  practicable  after  the  enactment  of  this  act  and  shidl  continue  in  office 
tuo  for  a  term  of  one  year,  and  the  remaining  five  for  terms  oj  tuo,  three,  four,  five,  and 
six  years,  respectively,  from  the  date  of  their  appointment,  the  term  of  each  to  he  designated 
by  the  President,  hut  their  successors  shall  he  appointed  for  terms  of  six  years,  except  that 
any  person  chosen  to  fill  a  vacancy  shall  be  appointed  only  for  the  unexpired  term  of  the 
commissioner  whom  he  succeeds.  The  commissioners  shall  be  appointed  ivith  due  regard 
to  their  fitness  for  the  efficient  discharge  of  the  duties  imposed  on  them  by  this  act,  and  two 
shall  he  appointed  from  the  Slates  touching  the  Pacific  Ocean,  tuo  from  the  Stales  touching 
the  Atlantic  Ocean,  one  from  the  States  touching  the  Gulf  of  Mexico,  one  from  the  States 
touching  the  Great  Lakes,  and  one  from  the  interior,  hut  not  more  than  one  shedl  he  ap- 
pointed from  the  same  Slate.  A  vacancy  in  the  board  shall  be  filled  in  the  same  manner 
as  the  original  appointment.  No  cotnmissioner  shall  take  any  part  in  the  consideration 
or  decision  of  ayiy  claim  or  particular  controversy  in  trhich  he  has  a  pecuniary  interest. 
Each  commissioner  shall  devote  his  time  to  the  duties  of  his  office  and  sludl  not  be  in  the 


12       PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE. 

employ  of  or  hold  any  official  relation  to  any  common  carrier  or  other  pa'son  subject  to 
this  act,  nor  uhile  holding  such  office  acquire  any  stock  or  bonds  thereof  or  become  pecu- 
niarily interested  in  any  such  carrier.  The  duties  of  the  board  may  be  so  divided  that  under 
its  supervision  the  directorship  of  various  activities  niay  be  assigned  to  one  or  more  com- 
missioners. Any  commissio7ier  may  be  removed  by  the  President  for  inefficiency,  neglect 
of  duty,  or  malfeasance  in  office.  A  vacancy  in  the  board  shall  not  impair  the  right  of 
the  remaining  membeis  of  the  board  to  exercise  all  its  powers,  and  ^our  members  shall 
constitute  a  quorum.  The  board  shall  have  an  official  seal,  which  shall  be  judicially 
noticed.  The  board  may  adopt  rules  and  regulations  in  regard  to  its  procedure  and  the 
conduct  of  its  business.  Each  member  of  the  board  shall  receive  a  salary  of  $12,000  per 
annum.  The  board  may  employ,  icithin  the  limits  of  appropriations  made  therefor  by 
Congress,  such  attorneys  as  it  finds  necessary  for  proper  legal  service  to  the  board  in  the 
conduct  of  its  ivorh,  or  for  proper  representation  of  the  public  interests  in  investigations 
made  by  it  or  cases  or  proceedings  pending  before  it  ivhether  at  the  board's  own  instance 
or  upon  complaint,  or  to  appear  for  or  represent  the  board  in  any  case  in  court  or  other 
tribunal,  any  provision  of  law  to  the  contrary  yiolvithstanding . 

Sec.  3  4.  That  all  mcrchaeti  vessels  and  other  property  or  interests  of  -n-hatsoever 
kind,  including  vessels  or  property  in  course  of  construction  or  contracted  for,  acquii'ed 
by  the  President  through  any  agencies  whatsoever  in  pursuance  of  authority  conferred 
by  the  Acts  asd  or  parts  of  Acts  repealed  by  section  i  2  of  this  Act,  or  in  pursuance  of 
the  joint  resolution  entitled  '  'Joint  resolution  authorizing  the  President  to  take  over 
for  the  United  States  the  possession  and  title  of  any  vessel  within  its  jurisdiction, 
which  at  the  time  of  coming  therein  was  owned  in  whole  or  in  part  by  any  corporation, 
citizen,  or  subject  of  any  nation  with  which  the  United  States  may  be  at  war,  or  was 
under  register  of  any  such  nation,  and  for  other  purposes,"  approved  May  12,  1917, 
with  the  exception  of  vessels  and  property  the  use  of  which  is  in  the  opinion  of  the 
President  required  in  the  military  and  naval  by  any  other  bra7^ch  of  the  Government 
service  of  the  United  States,  shall  bo  arc  hereby  transferred  to  the  board. 

Sec.  3  .5.  That  in  order  that  the  merchant  vcoocla  now  owned  or  controlled  by  tho 
United  Statca  may  be  returned  to  or  placed  under  private  owncrchip  and  operation,' 
and  to  the  end  that  an  efficient  merchant  marine,  adeciuate  to  meet  the  requircmenta 
of  our  ocean  borne  oommoreo  and  to  oerve  ao  a  naval  auxiliary  in  time  of  war  or  national 
emergency,  may  be  catabli^jhed  and  operated  by  citizens  of  the  United  Statco 
to  accom  plisli  the  declared  purposes  of  this  Act,  and  to  carry  out  the  pohcy  declared  in  section  1 
hereof,  the  board  is  hereby  authorized  and  directed  to  sell,  as  soon  as  practicable, 
consistent  with  good  business  methods  ajid  the  objects  and  purposes  to  be  attained  by  this 
Act,  to  persons  who  are  citizens  of  the  United  States  (as  defined  in  oection  2  of  tho 
Shipping  Act,  1916,  aa  amended)  except  as  provided  in  section  4  6  of  this  Act,  all  of 
the  vessels  referred  to  in  section  3  4  of  this  Act  or  otherwise  acquired  by  the  board. 
Such  sale  shall  be  made  at  such  prices  and  on  such  terms  and  conditions  as  the  board 
may  prescribe,  but  the  completion  of  the  payment  of  the  purchase  price  and  interest 
shall  not  be  deferred  more  than  fifteen  twenty  years  after  the  making  of  the  contract  of 
sale.  The  board  in  fixing  or  accepting  the  sale  price  of  such  vessels  is  authorized  to  shall 
take  into  consideration  in  fixing  the  aalc  price  of  ouch  vcooclo  the  prevailing  domestic 
and  foreign  market  price  of,  the  available  supply  of,  and  the  demand  for  xoi'sels,  freights 
received  and  prospects  of  their  maintenance,  the  cost  of  constructing  vessels  of  similar 
types  under  prevailing  conditions,  as  well  as  the  cost  of  the  construction  or  purchase 
price  of  the  vessels  to  be  sold,  and  any  other  facts  or  conditions  that  would  influence  a 
prudent,  solvent  business  man  in  the  sale  of  similar  vessels  or  property  which  he  is  not 
forced  to  sell:  Provided,  That  no  sale  shall  be  made  at  a  less  price  than  the  cost  at  the  time  of 
making  such  sale  of  constructing  vessels  of  similar  types  in  private  yards  in  the  United 
States,  after  deducting  the  depreciation  cliarge  against  the  vessels  sold  generally  allowed  in 
ahipving  operations.  All  sales  made  under  the  authority  of  this  Act  shall  be  stibject 
to  tne  limitations  and  restrictions  of  section  9  of  the  "Shipping  Act,  ei  1916"  as 
amended. 

Sec.  4  6.  That  the  board  is  hereby  authorized  and  empowered,  if  unable  to  sell  to 
American  citizens  after  diligent  effort  so  to  do,  to  sell  to  aliens,  at  such  i)rices  and  on  such 
terms  and  conditions  as  it  may  determine,  oubjcot  to  the  oamc  limitation  as  to  compfe- 
tion  of  time  of  payments  ao  provided  in  occtiou  ij  except  that  payment  therefor  shall  be 
completed  within  ten  years,  such  vessels  having  a  dead-weight  tonnage  of  not  exceeding 
six  thousand  tons,  unless  such  vessels  arc  over  ten  years  of  age,  as  it  shall,  after  careful 
investigation,  deem  unnecessary  to  the  promotion  and  maintenance  of  an  efficient 
American  merchant  marine,  ana  it  shall  make  as  a  part  of  its  records  a  full  statement  of  its 
reasons  for  making  such  sale. 

Sec.  7.  That  the  board  is  authorized  and  directed  to  investigate  and  determine  as  promptly 
as  possible  after  the  enactment  of  this  Act  and  from  time  to  time  thereafter  what  steamship 
lines  should  be  established  and  put  in  operation  from  ports  in  the  TJnited  States  or  any 
Territory,  District,  or  possession  thereof  vjhere  adequate  terminal  connections  with  rail 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE.       13 

carriers  cnn  and  irill  be  made  or  already  exist  to  such  vorld  markets  as  in  its  judgment  are 
desirable  for  the  prnmotioyi,  development,  expansion,  and  maintenance  of  the  foreign  and 
coasttvi^e  trade  of  the  United  States  and  an  adequate  postal  service,  and  to  determine  the 
type,  size,  speed,  and  other  requirements  of  the  vessels  to  be  employed  upon  such  lines  and 
the  frequenci/  and  regularity  of  their  sailings,  with  a  view  to  furnishing  adequate,  regular, 
certain,  and  perwancnt  seri'ice.  The  board  is  authorized  to  sell,  and  if  a  sati-sfactory  sale 
can  not  he  made,  to  rharter  such  of  the  vessels  oj  the  United  Stales  as  vnll  meet  these  require- 
ments to  respniisihle  persons  uho  are  citizens  of  the  Utiiled  Slates  vho  agree  to  establish 
and  maintain  such  lines  upon  such  terms  of  payment  and  other  conditions  as  the  hoard 
may  deem  just  and  necessarij  to  secure  and  maintain  the  service  desired;  and  if  any  such 
steamship  line  is  deemed  desirable  and  necessary,  and  if  no  such  citizen  can  be  securrd  to 
supply  such  service  by  the  purchase  or  charter  of  vessels  on  terms  satisfactory  to  the  board, 
the  board  shall  operate  vessels  on  such  line  until  the  business  is  developed  so  that  such  vessels 
may  be  sold  on  satisfactory  terms  and  the  service  maintaiyted,  or  unless  it  shall  appear 
icithin  a  reasoyiahle  time  that  snrh  line  can  not  be  made  self-suMaining.  The  Postmaster 
General  is  authorized  to  contract  for  the  carri/ing  of  the  mails  over  such  lines  at  such  price 
as  may  be  agreed  upon  by  the  board  and  the  Postmaster  General:  Provided,  That  preference 
in  the  sale  or  assignment  of  vessels  for  operation  on  s\ich  steamship  lines  shall  be  given  to 
persons  who  are  citizens  of  the  United  Slates  who  have  the  support ,  financial  and  otherivise, 
of  the  domestic  communities  primarily  interested  in  such  lines  if  the  board  is  satisfied  of 
the  ability  of  such  pcrsotis  to  maintain  the  service  desired  and  proposed  to  be  maintained, 
or  to  persons  who  are  citizens  of  the  United  States  vho  may  then  be  maintaining  a  service 
from  the  port  of  the  United  Stoics  to  or  in  the  general  direction  of  the  trorld  market  port  to 
which  the  board  has  determined  that  such  service  should  be  eslahlished:  Provided  further, 
That  where  steainship  lines  and  regular  service  have  been  established  and  are  being  main- 
tained by  ships  of  the  bcxird  at  the  time  of  the  enactment  of  this  Act,  such  lines  and  service 
shall  be  inaintained  by  the  board  until,  in  the  opinion  of  the  hoard,  the  maintenance  thereof 
is  U7}businesslike  and  against  the  public  interests. 

Sec.  S.  That  it  shall  be  the  duty  of  the  board,  with  the  object  of  promoting,  encouraging, 
and  developing  ports  and  transportation  facilities  in  connection  with  water  commerce  over 
which  it  has  jurisdiction,  to  investigate  territorial  regions  and  zones  tributary  to  such  ports, 
taking  into  consideration  the  economies  of  transportation  by  rail  and  highway  and  the 
natural  direction  of  the  flow  of  commerce;  to  investigate  the  causes  of  the  congestion  of 
commerce  at  ports  and  the  remedies  applicable  thereto;  to  investigate  the  subject  of  water 
terminals,  including  the  necessary  docks,  warehouses,  apparatus,  equipment,  and  appliances 
in  connection  therewith,  with  a  view  to  devising  and  suggesting  the  types  most  appropriate 
for  different  locations  and  for  the  most  expeditious  and  economical  transfer  or  interchnnge 
of  passengers  or  property  between  carriers  by  water  and  carriers  by  rail;  to  advise  with  com- 
munities regarding  the  appropriate  location  and  plan  of  construction  of  wharves,  piers, 
arul  water  terminals;  to  investigate  the  practicability  and  advantages  of  harbor,  river,  and 
port  improvements  in  connection  ivith  foreign  and  coastwise  trade;  and  to  investigate  any 
other  matter  that  7nay  tend  to  promote  and  encourage  the  use  by  vessels  of  ports  adequate  to 
care  for  the  freight  which  tcould  naturally  pass  through  such  ports:  Provided,  That  if  after 
such  investigation  the  board  shall  be  of  the  opinion  that  rates,  charges,  rules,  or  regulations 
of  common  carriers  by  rail  subject  to  the  jurisdiction  of  the  Interstate  Commerce  Commis- 
sion are  detrimental  to  the  declared  object  of  this  section,  or  that  new  rates,  charges,  rules, 
or  regulations,  new  or  additional  port  terminal  facilities,  or  affirmative  action  on  the  part 
of  such  commo7i  carriers  by  rail  is  necessary  to  promote  the  objects  of  this  section  the  board 
may  submit  its  findings  to  the  Interstate  ('ommcrce  Commission  for  such  action  as  such 
commission  may  consider  proper  under  existing  lau\ 

Skc.  &  9.  That  if  tho  terms  and  conditions  of  any  sale  of  a  vessel  made  under  the 
provisions  of  this  Act  inrlude  deferred  payments  of  the  purchase  price,  the  board  (i» 

have  additional  oceurity  for  the  paymont  of  the  balaHee-of-tfae-^ttfebage-fjri^e-aB^ 
cbargca)  shall  require  af  part  of  tbe  such  terms  and  conditions,  that  thf  purchaser  of 
th(>  vessel  shall  keep  the  same  insured  (a)  against  loss  or  damage  by  fire,  and  against 
ftii  marine  risks  and  disasters,  and  war  and  other  risks  if  the  board  so  specities,  with 
such  insurance  companies,  association^or  underwriters,  and  under  such  forms  of  policies, 
and  fo  .s»c/?  an  amount,  approved  by  as  ibc  board  may  prescribe  or  approve,  which 
jnouranec  ohall  be  made  payable  to  it  in  the  event  of  partial  looo  or  oollioion  liability; 
and  (b)  by  protection  and  indemnity  insurance  with  such  insurance  companies,  asso- 
ciations, <n-  ui.tlerwriters  and  under  such  forms  of  policies,  and  to  such  an  amount 
approved  by  thc-board  as  the  board  may  prescribe  or  approve.  The  i)isurance  required 
to  be  carried  under  this  section  shall  be  made  payable  to  the  board  and/or  to  the  parties  as 
interest  may  appear.  The  board  u  authorized  to  enter  into  any  agreement  that  it  deems 
wise  in  respect  to  the  payment  and/or  the  guarantee  of  premiums  of  insuruyice. 


14     pro:motiox  and  maintenance  of  the  American  marine. 

Sec.  6  10.  That  the  board  may  create  out  of  net  revenue  from  operations  and  salo:^ 
and  maintain  and  administer,  a  ?tparate  insurance  fund,  is  which  it  may  use  to  insure 
in  whole  or  ir  part,  asainst  all  hazards  usually  commonly  covered  by  insurance  polici;' 
in  such  cases,  any  interest  of  the  United  States  (1)  in  any  vessel,  either  construct''' 
or  in  process  of  construction,  and  (2)  in  any  plants  or  materials  heretofore  or  hereafic 
acquired  bv  the  board  or  hereby/  transferred  to  the  hoard.     The  board  ohall  at  all  tinu 


eoourc  any  such  policico,  and  to  oceurc  the  rcaoonabiC' oosto,  cxpcnocs,  „^vi  ^i.«if,^ 
of  maintaining  ouch  iruurancc  fund,  and  ohall  annually  pay  into  the  Treasury  of  th< 
United  gtatco,  aa  misccllancoua  rcocipta,  any  net  protito  realized  from  the  opcratiot 
of  juch  imrairanec  fund. 

Sic.'ll.  That  during  a  period  of  Jive  years  from  the  enactment  of  this  Act  the  board  ma; 
anmtally  set  aside  out  of  th£  revenues  from  sales  and  operations  a  sum  not  exccediru 
^■50,000,000,  to  be  hnoun  as  its  construction  fund,  to  be  used  in  the  construction  or  ii 
aid  of  the  constniction  of  vessels  of  the  best  and  most  efficient  type  for  the  establishment  an( 
maintenance  of  service  on  steamship  lines  deemed  desirable  and  necessary  by  the  board,  an( 
such  vessels  shall  be  equipped  tvith  the  most  modern,  the  most  efficient,  and  the  most  eco- 
nomical machinery  and  commercial  appliances.  The  board  shall  use  such  fund  to  tht 
extent  required  upon  such  terms  as  the  board  may  prescribe  to  aid  persons  citizens  of  thi 
United  States  in  the  construction  by  them  in  private  shipyards  in  the  United  States  of  tht 
foregoinq  class  of  vessels.  No  aid  shall  be  for  a  greater  sum  than  for  tico-thirds  of  thecosi 
of  the  vessel  or  vessels  to  be  constructed  and  the  board  shall  recjuire  such  security,  including  (■ 
fir.^t  lien  upon  the  entire  interest  in  the  vessel  or  vessels  so  constructed,  as  it  shall  deem 
necessary  to  insure  the  repayment  of  such  sum  ivith  interest  thereon  and  the  maintenance  oj 
the  service  for  which  such  vessel  or  vessels  are  built.  If  there  are  routes  upon  which  th< 
board  deems  it  highly  important  to  establish  service  requiring  vessels  of  the  kind  descrihco 
in  this  section  and  responsible  persons  citizens  of  the  United  States  can  not  be  found  tc 
construct  the  same,  the  board  may  consti-uct  such  vessels  out  of  such  fund  in  private  ship- 
yards in  the  United  States,  but  no  contract  for  such  construction  shall  be  let  on  a  cost-pluk 
basis;  and  when  such  vessels  are  sold  the  board  shall  require  a  cash  payment  of  not  less 
than  25  per  centum  of  the  purchase  price  and  ample  securitiifor  deferred  payments.  Interest 
on  loans  made  under  this  section  and  on  deferred  payments  shall  be  at  a  rate  not  less  than 
4  per  centum  per  annum,  payable  semiannually. 

Sec.  ?  12.  That  all  vessels  set  until  sold  shall  be  managed  and  operated  by  the 
board  or  chartered  or  leased  by  it  on  such  terms  and  conditions  as  the  board  shall  deem 
■\visf  for  tlie  proniotion  and  maintenance  of  an  efficient  merchant  marine, 
provided  the  operation,  charter,  or  lease  of  such  veeeelB  by  the-beafd-efeall-be-lJaH€4 
to  the  time  fixed  pursuant  to  the  policy  and  purposes  declared  in  sections  1  and -o  of  this 
Ad;  and  the  United  States  Emergency  Fleet  Corporation  shall  continue  in  existence  and 
have  authority  to  operate  vessels  until  all  vessels  are  sold  in  accordance  with  the  provisions 
of  this  Act,  the  provision  in  section  11  of  the  "Shipping  Act,  1916,"  to  the  contrary  not- 
withstanding. 

Sec.  8  IJ.  That  the  board  is  further  authorized  to  sell  aey  all  property  other  than 
vessels  transferred  to  it  imder  section  3  4  under  upon  such  terms  and  conditions  as  the 
IxKirrl  may  determine  and  prescribe^-,  ]>ut  eomplction  of  payment  of  the  purehapc  price 
eball  be  within  five  years  from  the  date  of  the  contract  of  mie. 

Sec.  9  14.  That  the  net  proceeds  derived  by  the  board  prior  to  July  1,  i939  1921, 
from  any  activities  authorized  by  this  Act,  or  by  the  "Shipping  Act,  1916,"  or  by  the 
Acts  specified  in  section  2  of  this  Act  oavc  except  such  an  amoimt  as  the  board  shall  deem 
neces.sary  to  \nthhold  as  operating  capital,  for  the  purposes  of  section  ?  12  of-thiaAet 
hereif,  er  and  for  the  insurance  fund  authorized  in  section  6  10  hereof,  and  for  the  con- 
struction fund  authorized  in  section  11  hereof,  shall  be  (-overed  into  the  Treasury  of  the 
United  States  to  the  credit  of  the  board  and  may  be  expended  by  it,  wdthin  the  limits 
of  the  amounts  heretofore  or  hereafter  authorized,  for  the  construction,  requisitioning, 
or  i)urchasing  of  vessels.  After  July  1,  i930  1921,  such  net  proceeds,  less  such  an 
amount  as  may  be  authorized  annually  by  Congress  to  be  withheld  as  operating  capital, 
ef  and  less  such  sums  as  may  be  needed  for  such  insurance  and  construction  i^ii4  funds 
shall  be  covered  into  the  Treasury  of  the  United  States  as  miscellaneous  receipts. 
The  board  shall,  as  rapidly  as  it  deems  advisable,  withdraw  investment  of  Covern- 
mcnt  funds  made  during  the  emergency  under  the  authority  conferred  by  the  Aet  Acts 
or  part.s  of  .Acts  repealed  by  section  i  J  of  this  vVct  and  cover  the  net  proceeds  thereof 
into  the  Treasury  of  the  United  States  as  miscellaneous  receii)t8. 

Sec.  -19  l.j.  Tiiat  the  board  shall  not  nujuire  ])aynient  from  the  War  Department 
for  tin*  charter  liin;  of  vc^ssois  oicncd  by  the  United  Stales  Government  furnished  by  the 
board  {r>,u\  .]\\\y  I.  lOIK,  lo  .Iiinc  :{(),  I')  in,  inclusive,  for  t  lie  use  of  the  SHc/t  department 
when  uueh  vcDiJclo  arc  owned  by  the  United  Statca  Government. 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE.       15 

Skc.  a  16.  That  all  authorization  to  purrhm^r,  loiihl.  ron'iii«itir>n.  Irnsc,  er  oxrhan.Jre, 
or  otherwise  nrrpiire  houses,  er  huildinss  or  to  purchflgc  or  requisition  land  undr^r  the 
Aft  entitled  "An  Art  to  authorize  and  empower  tlie  United  .States  Shippinj?  lioard 
Eineruienfy  Fleet  Corporation  to  purchase,  lease,  requisition,  or  otherwise  aequire, 
and  t()  sell  or  othermse  dispose  of  improved  or  unimprovod  hands,  jiouses,  buildin,s:s, 
and  for  other  p\irposos,"  approved  March  1,  101S,  is  ounpendcd  herehij  tcnnivnted: 
I'rnridfd,  hoirerer,  That  expenditviros  may  l)e  made;  uiid<-r  said  Act  for  the  fcpaifB 
repair  of  houses  and  buildin,y:s  already  constructed,  and  llic  completion  of  sucli  houses 
or  1)uildin2:s  as  have  heretofore  l)cen  contracted  for  aftd  or  are  under  construction, 
if  considered  advisable,  and  the  Itoard  is  authorized  and  directed  to  dispose  of  fill 
such  properties  or  the  interest  of  the  United  States  in  all  such  properties  at  as  early 
a  date  as  practicable,  consistent  with  (jood  business  and  the  best  interests  of  the  United 
States. 

Sec.  17.  That  the  board  is  authorized  and  directed  to  faJce  over  the  possession  and  control 
of  all  dorks,  piers,  varehoiises,  vharves,  and  terminal  erpripment  and  facilities,  inrhiding 
(ill  leasehold  easenienis,  rights  ofuaij,  riparian  rights,  and  other  rights,  estates,  mid  inter- 
ests therein  or  appurtenant  thereto,  acquired  by  the  President  by  or  vnder  the  Act  entitled 
".l7(.  Act  making  appropriations  to  supply  urgent  deficiencies  in  appropriations  for  the 
fiscal  year  eruling  June  30,  191S,  and  prior  fiscal  years,  on  account  of  war  expenses,  and 
for  other  purposes,"  approved  March  28,  1918:  Provided,  That  the  President  may  at  any 
time  he  may  deem  it  necessary  by  order  setting  out  the  need  therefor  and  fixing  the  period 
of  such  need,  tran.sfer  the  possession  and  control  of  any  part  of  such  properties  to  the  War 
Department  or  the  N'avy  Department,  and  when  such  need  therefor  ceases  such  property 
shall  return  to  the  board,  and  none  of  such  propeiiy  shall  be  disposed  of  except  as  may  be 
herenfler  provided  by  law. 

Sec.  18.   That  section  9  of  the  "Shipping  A  ct,  1916, ' '  is  amended  to  read  asfolloirs: 

"Sec.  9.  That  any  vessel  purchased,  chartered,  or  leased  from  the  board,  by  persons  ivho 
ire  citizens  of  the  United  States,  may  be  registered  or  enrolled  and  licensed,  or  both  regis- 
tered and  enrolled  and  licensed,  as  a  vessel  of  the  United  States  and  entitled  to  the  benefits 
and  privileges  appertaining  thereto:  Provided,  That  foreign-built  ves.^els  admitted  to 
American  registry  or  enrollment  and  license  under  this  Act,  and  vessels  owned  by  any 
corporation  in  ivhich  the  United  States  is  a  stockholder,  and  vessels  sold,  leased,  or  char- 
tered to  any  person  a  citizen  of  the  United  States,  as  provided  in  this  Act,  may  engage  in 
the  coastirise  trade  of  the  United  States  while  owned,  leased,  or  chartered  by  such  a  person. 

"Every  vessel  purchased,  chartered,  or  leased  from  the  board  shall,  unless  otherwise 
lutliorized  by  the  board,  be  operated  only  under  such  registry  or  enrollment  and  iiceifse. 
^uch  vessels  while  employed  solely  as  merchant  vessels  shall  be  subject  to  all  laws,  regula- 
'ions,  and  liabilities  governing  merchant  vessels,  ivhether  the  United  States  be  interested 
therein  as  owner,  in  whole  or  in  part,  or  hold  any  mortgage,  lien,  or  other  interest  therein. 

"It  shall  be  unlauful  to  charter,  sell,  transfer,  or  mortgage  any  vessel  purchased  from 
'he  board  or  documented  under  the  laws  of  the  United  States  to  any  person  not  a  citizen  of 
'he  United  States,  or  to  put  the  same  under  a  foreign  registry  or  fag,  without  first  obtain- 
<ng  the  board's  approval,  and  in  giving  its  consent  to  the  sale  of  privately  owned  vessels 
locum ented  under  the  laws  of  the  United  States  to  aliens,  the  board  shall,  so  far  as  it  deems 
'rise,  require  the  proceeds  of  such  sales  to  be  invested  and  used  in  the  construction  in  ship- 
lards  in  the  United  States  of  other  vessels  of  a  superior  type  to  be  operated  under  the  flag 
y  the  United  States:  Provided,  That  the  board  may  make  provision  for  trip  charters  to 
i  liens. 

"Any  vessel  chartered,  sold,  transferred,  or  mortgaged  to  an  alien  or  placed  under  a 
''oreign  registry  or  flag,  or  operated,  in  violation  of  any  provision  of  this  section  shall  be 
•orfeited  to  the  United  States,  and  whoever  violates  any  provision  of  this  section  shall  be 
luilty  of  a  misdemeanor  and  subject  to  a  fine  of  not  more  than  $5,000,  or  to  imprisonment 
'or  not  more  than  fire  years,  or  both." 

Sec.  19.  That  the  board,  as  soon  as  practicable  after  the  enactment  of  this  act  and  from 
'ime  to  time  thereafter,  is  authorized  and  directed  to  detemnine  what  apprentices  should  be 
•arried  upon  vessels  documented  under  the  laws  of  the  United  States  and  to  prescribe  the 
luties,  compensation,  and  conditions  of  employment  of  such  apprentices  and  to  make  rules 
md  regulations  requirinj  such  apprentices  to  be  carried  on  the  vessels  of  the  board,  on 
'essels  sold  by  it,  and  on  vessels  having  contracts  for  the  carrying  of  the  mails,  and  the 
loard  is  directed  to  submit  to  Congress  from  time  to  time  its  recommendations  for  addi- 
ional  legislation  to  make  available  a  sufficient  number  of  officers  and  able  seamen  who 
ire  citizens  of  the  United  States  to  ofiicer  and  man  the  merchant  marine  of  the  United  States 
'n  such  an  extent  as  it  may  deem  desirable:  Provided,  That  nothing  in  titis  act  shall  be 
'pnstrued  to  impair  any  existing  j)ouer  or  authority  of  Uie  board  to  organize  or  maintain 
ts  recruiting  service. 

Sec.  20.  That  the  board  is  authorised  and  directed  in  aid  of  the  accomplishment  of  the 
pu-poses  of  this  Act  to  make  rules  and  regulations  to  carry  into  effect  the  provisions  of  this 
Act,  and  to  make  and  to  change  at  will  such  rules  and  regulations  relating  to  vessels  and 


16       PROMOTIOK  AI^D  MAINTENANCE  OF    THE  AMERICAN   MARINE. 

foreign  and  coastirixe  shipping,  not  in  conflict  xrith  existing  law.  as  will  adjust  or  mtef 
general  or  special  conditions  unfavorable  to  such  shipping,  whether  in  any  particular  trade 
or  upon  any  particular  route  or  in  commerce  generally  and  arising  out  of  or  resulting  from 
foreign  laws,  regulations,  or  rules  or  from  competitive  methods  or  practices  employed  by 
oicners,  operators,  agents,  or  masters  of  vessels  under  a  foreign  flag,  and  existing  rules  or 
regulations  affecting  foreign  or  coastwise  shipping  or  trade,  other  than  those  relating  to  the 
Public  Health  and  the  Steamboat- Inspection  Service,  heretofore  issued  by  any  Govern- 
ment department,  bureau,  or  agency  inay  he  suspended,  modified,  or  annulled  upon  request 
of  the  board:  and  no  rule  or  regulation  affecting  foreign  or  coastwise  shipping  or  trade, 
except  those  affecting  the  Public  Tlealth  and  the  Steamboat- Inspection  Service,  shall  hereafter 
be  issued  or  promulgated  by  any  department,  bureau,  or  agency  of  tlu  United  SUihs  unless 
and  until  the  same  shall  be  approved  by  the  board:  and  no  rule  or  regulation  shall  be  issued 
by  the  board  favoring  in  any  way  vessels  owned  by  the  United  States  over  vessels  privately 
owned  and  documented  unejer  the  laics  of  the  United  States:  Provided.  That  in  case  of  a 
disagreement  betireen  the  board  and  the  head  of  any  department,  bureau,  or  agenqj  over  the 
sxispension.  modification,  or  annulment  of  rules  and  regulations  heretofore  issued  by  such 
department,  bureau,  or  agency,  or  over  the  issuance  or  promulgation  of  rules  and  regulations 
hereafter  made,  such  disagreement  shall  be  submitted  to  the  President  and  action  tahcn  in 
accord  ivith  his  decision  thereon. 

Sec.  21 .  That  whenever  the  b'oard  shall  have  satisfactory  reason  to  believe  that  any  person 
owning  or  operating  a  vessel  under  a  foreign  flag  has  violated  any  of  the  provisions  of 
sections  14  or  16  of  the  "Shipping  Act.  1916,"  it  is  hereby  authorized  to  issue  an  order  to 
that  effect  and  notify  the  Secretary  of  Covimerce  thereof,  and  thereafter  no  vessel  in  which 
such  person,  or  in  case  such  person  is  a  firm,  association,  or  corporation,  any  member  or 
director  thereof,  has  any  interest,  and  no  vessel  operated  by  or  belonging  to  any  affiliated 
person  shall  be  permitted  to  enter  any  of  the  ports  of  the  United  States  until  the  board  is 
convinced  that  such  practices  have  been  abandoned  and  issues  an  order  declaring  such  to  be 
the  case  and  notifies  the  Secretary  of  Commerce  thereof. 

Sec.  22.  That  the  board  shcdl  ascertain  and  determine  the  need  for  vessels  between  the 
ocean  terminal  of  the  Government  railroad  in  Alaska  and  Pacific  and  other  ports,  and  if 
suitable  and  satisfactory  arrangements  can  not  be  perfected  to  meet  such  need  through 
vessels  privately  owned  and  operated  the  board  is  directed  to  furnish  suitable  service  until 
it  can  be  tuhen  over  and  suppUed  by  private  capital  and  enterprise. 

Sec.  23.  That  from  and  after  one  year  from,  the  enactment  of  this  act  the  coastwise  laws  of 
the  United  States  shall  extend  to  the  island  Territories  and  possessions  of  the  United  States 
no%  now  covered  thereby,  and  the  board  is  directed  prior  to  the  expiration  of  such  year  to  have 
established  adequate  steamship  service  at  reasonable  rates  to  accommodate  the  commerce  and 
the  passenger  travel  of  said  islands  and  to  maintain  and  operate  such  service  until  it  can  be 
taken  over  and  operated  and  maintained  upon  satisfactory  terms  by  private  capital  and 
enterprise:  Provided,  That  if  adequate  shipping  service  is  not  established  uithin  a  year  the 
President  shall  extend  the  period  herein  allowed  for  the  establishment  of  such  service  in  the 
case  of  any  island  Territory  or  possession  for  such  time  as  may  be  necessary  for  the  establish- 
ment (f  adequate  shipping  facilities  therefor. 

Sec.  24-  That  the  act  entitled  "An  act  giving  the  United  States  Shipping  Board  power  to 
suspend  present  provisions  of  law  and  permit  vessels  of  foreign  registry  a7id  foreign-built 
vessels  admitted  to  American  registry  under  the  act  of  August  18,  1914,  to  engage  in  the  coast- 
wise trade  during  the  present  war  and  for  a  period  of  one  hundred  and  twenty  days  thereafter, 
except  the  coastwise  trade  ivith  Alaska,"  approved  October  6,  1917.  is  hereby  repealed: 
Provided,  That  all  foreign-built  vessels  admitted  to  the  coastwise  trade  under  such  act  for  the 
full  period  covered  by  the  act  and  which  are  wholly  owned  by  persons  who  are  citizens  of  the 
United  States,  and  foreign-built  vessels  opened  by  the  United  States  at  the  time  of  the  enact- 
ment of  this  act,  if  sold  to  such  persons,  may  operate  in  the  coastwise  trade  so  long  as  they  are 
owned  by  such  persons. 

Sec.  25.  That  the  owner  of  a  vessel  documented  under  the  laws  of  the  United  States  and 
operated  in  foreign  trade  shall,  for  each  of  the  ten  taxable  years  beginning  with  the  first  taxable 
year  ending  after  the  enactment  of  Oils  Act,  be  allowed  as  a  deduction  for  the  purpose  of  ascer- 
taining his  net  income  subject  to  the  ivar-profits  and  excess-profits  taxes  imposed  by  Title  III 
of  the  Revenue  Act  ofl91S  an  amount  eeiuivalent  to  the  net  earnings  of  such  vessel  during  such 
taxable  year,  determined  in  accordance  with  rules  and  regulations  to  be  made  by  the  board: 
Provided,  That  such  owner  shall  not  he  entitled  to  such  deduction  unless  during  such  taxable 
year  he  invested,  or  set  aside  binder  rules  aiid  regulations  to  be  made  by  the  board  in  a  trust 
fund  for  investment,  in  the  building  in  shipyards  in  the  United  States  of  new  vessels  of  a 
type  and  kind  apjiroved  by  the  board,  an  amount,  to  be  determined  by  the  Secretary  of  the 
Treasury  and  certified  by  him  to  the  board,  etjuivalent  to  the  war-profits  and  excess-profits 
taxes  that  would  have  been  payable  by  such  owner  on  account  of  the  net  earnings  of  such 
vessels  but  for  the  deduction  allowed  under  the  provisions  of  this  section,  or  unless  such 
oumer,  vAth  the  approval  of  the  board  {to  be  given  only  if  because  of  the  smallness  of  f 


PROMOTION  AND   MAINTENANCE  OF   THE  AMERICAN   MARINE.       17 

amount  involved  the  board  deems  it  best  for  the  interests  of  the  United  States),  applies  such 
amount  on  any  mortgage  indebtedness  due  to  the  United  States  for  the  purchtise  of  ships. 

That  during  the  period  of  ten  years  from  the  enactment  of  this  Act  any  person  a  citizen 
of  the  United  States  who  may  sell  a  ressel  built  prior  to  January  1,  1914,  shall  be  exempt 
from  all  income  taxes  that  would  be  payable  upon,  any  of  the  proceeds  of  such  sale  if  the 
entire  proceeds  thereof  shall  be  invested  in  the  building  of  new  ships  in  American  shipyards, 
such  sfiips  to  be  documented  under  the  laws  of  the  United  States  and  to  be  of  a  type  approved 
by  the  board. 

The  Secretary  of  the  Treasury,  the  Secretary  of  Commerce,  and  Oie  chairman  of  the  board 
are  hereby  authorized  and  directed  to  determine  from  time  to  time  what  shall  be  alloued  for 
annual  depreciation  of  vessels  purchased  from  the.  UnAted  States,  or  vessels  completed  in  the 
United  States,  since  November  11,  1918,  in  order  that  the  owners  of  such  vessels  shall,  with 
respect  to  the  capital  cost  thereof,  be  put  as  nearly  as  may  be  on  a  parity  ivith  the  owners  of 
ships  under  the  flag  of  our  foreign  competitors  in  the  world's  carrying  trade,  and  sudi 
allowances  shall  be  embraced  in  the  deductions  allowed  by  law  in  determining  the  net  income 
subject  to  income  taxes  and  war-profits  and  excess-profits  taxes;  and  if  said  Secretaries  and 
the  chairman  of  the  board  are  unable  to  reach  a  unanimous  decision  in  such  matter,  it  shall 
be  referred  to  the  President  and  his  decision  shall  govern  therein. 

Sec.  2S.  That  all  mails  oj  the  United  States  shipped  or  carried  on  vessels  shall,  if  prac- 
ticable, be  shipped  or  carried  on  American-built  vessels  documented  under  the  laws  of  the 
United  States.  No  contract  vnth  the  I'ostntaster  General  for  carrying  mails  on  vessels  so 
built  and  documented  shall  be  assigned  or  sublet,  and  no  mails  covered  by  such  contract 
shall  be  carried  on  any  vessel  not  so  built  and  documented.  No  money  shdl  be  paid  out 
of  the  Treasury  of  the  Unittd  States  on  or  in  relation  to  any  contract  for  carrying  mails  on 
vessels  so  built  and  documented  when  such  contract  has  been  assigned  or  sublet  or  when 
mails  covered  by  such  contract  are  in  violation  of  the  terms  thereof  carried  on  any  vessel  not 
80  built  and  documented.  The  board  and  the  Postmaster  General,  in  aid  of  the  develop- 
ment of  a  merchant  marine  adequate  to  proviik  for  the  maintenance  and  expansion  of  the 
foreign  or  coastwiae  trade  of  the  United  States  and  of  a  satisfactory  postal  service  in  con- 
nection therewith,  shall  from  time  to  time  determine  the  proper  rate  of  compensation  to  be 
paid  for  such  service,  and  the  Postnuister  General  is  hereby  authorized  to  enter  into  con- 
tracts to  pay  for  the  carrying  of  such  mails  in  such  vessels  at  such  rate. 

Sec.  21 .  That  for  the  classification  of  vessels  owned  by  the  United  States,  and  for  such 
other  purposes  in  connection  therewith  as  are  the  proper  functions  of  a  classification  bureau, 
all  departments,  boards,  bureaus,  and  commissions  of  the  Government  are  hereby  directed 
to  recognize  the  American  Bureau  of  Shipping  or  any  other  similar  organization  approved 
by  the  board  composed  of  American  citizens,  chartered  in  the  United  States,  and  90  pe^ 
centum  of  whose  surveyors  shall  be  American  citizens,  as  their  agency  so  long  as  the  Ameri- 
can Bureau  of  Shipping  or  such  approved  organization  continues  to  be  maintained  as  an 
organization  which  has  no  capital  stock  and  pays  no  dividends:  Provided,  That  the  Secre- 
tary of  Ccmimerce  and  the  chairman  of  the  board  shall  each  appoint  one  representative  who 
shall  represent  the  Government  upon  the  executive  committee  of  the  American  Bureau  of 
Shipping,  and  the  Bureau  shall  agree  that  these  representatives  shall  be  accepted  by  them 
as  active  members  of  such  committee.  Such  representatives  of  the  Government  shall  serve 
without  any  compensation,  except  necessary  traveling  expenses:  Provided  further.  That 
the  official  list  of  merchant  vessels  published  by  the  Government  shall  hereafter  contain  a 
notation  clearly  indicating  all  vessels  classed  by  the  American  Bureau  of  Shipping. 

Sec.  28.  That  cargo  vessels  documejited  under  the  laws  of  the  United  States  may  carry 
not  to  exceed  twelve  persons  in  addition  to  the  crew  between  any  ports  or  places  in  the  United 
States  or  its  Districts,  Territories,  or  possessions,  or  between  any  such  port  or  place  and 
any  foreign  port,  or  from  any  foreign  port  to  another  foreign  port,  and  such  vessels  shall 
not  be  held  to  be  "passenger  vessels"  or  "vessels  carrying  passengers"  within  the  meaning 
of  the  inspection  laws  and  the  rules  and  regulations  thereunder:  Provided,  That  nothing 
herein  shall  be  taken  to  exempt  such  vessels  from  the  laws,  rules,  and  regulations  respecting 
life-saving  equipment:  Provided  further,  That  when  any  such  vessel  carries  persons  other 
than  the  crew  as  herein  provided  for,  the  owner,  agent,  or  master  of  the  vessel  shall  first 
notify  such  persons  of  the  presence  on  board  of  any  dangerous  articles,  as  defined  by  law, 
or  of  any  other  condition  or  circumstance  which  would  constitute  a  risk  of  safety  for  pas- 
senger or  crew. 

Failure  on  the  part  of  the  owner,  agent,  or  master  of  the  vessel  to  give  such  notice  shall 
subject  the  vessel  to  a  penalty  of  f. 500,  which  may  be  mitigated  or  remitted  by  the  Secretary 
of  Commerce  upon  a  proper  representation  of  the  facts. 

Sec.  29.  That  no  merchandise  shall  be  transported  by  water,  or  by  land  and  ivater,  on 
penalty  of  forfeiture  thereof,  between  points  in  the  United  States,  including  Districts,  Ter- 
ritories, and  possessions  thereof  embraced  within  the  coastwise  laivs,  either  directly  or  via 
a  foreign  port,  or  for  any  part  of  the  transportation,  in  any  other  vessel  than  a  vessel  built 

116737—20 2 


18       PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE. 

in  artd  documented  under  the  loics  of  the  United  States  and  wholly  owned  by  persons  who 
are  citizens  of  the  United  States,  or  vessels  to  which  the  privilege  of  engaging  in  the  coast- 
wise trade  is  extended  by  sections  IS  or  2 A  of  this  Act.  No  agent  or  employee  of  a  common 
carrier  shall  check  baggage,  issue  bills  of  lading,  or  otherwise  arrange  for  through  carriage 
of  property  between  ports  or  places  in  the  United  States,  including  Districts,  Territories, 
and  possessions  embraced  u'ithin  the  coastrvise  laws,  when  all  or  any  part  of  the  carriage  is 
in  a  foreign  vessel,  and  no  person  in  the  capacity  of  agent  or  otherwise,  directly  or  indi- 
rectly, by  means  of  a  ticket,  understanding ,  order,  or  any  form  of  contract  whatsoever,  shall 
sell  or  contract  to  sell  to  any  person  the  right  to  travel  by  water,  or  by  land  and  tvater,  either 
directly  or  via  a  foreign  port,  or  for  any  part  of  the  transportation,  on  a  foreign  ship, 
between  ports  or  places  in  the  United  States,  including  Districts,  Territories,  and  posses- 
sions embraced  icithin  the  coastwise  laivs.  Any  person  violating  any  of  the  provisions  of 
this  section  shall,  upon  conviction,  be  fined  in  any  sum  not  exceeding  ■fil,000. 

Sec.  30.  That  no  common  carrier  shall  charge,  collect,  or  receive,  for  transportation 
subject  to  the  Interstate  Commerce  Act  of  persons  or  property,  under  any  joint 
rate,  fare,  or  charge,  or  under  any  export,  import,  or  other  proportional  rate,  fare, 
or  charge,  which  is  based  in  whole  or  in  part  on  the  fact  that  the  persons  or  property  affected 
thereby  is  to  be  transported  to,  or  has  been  transported  from,  any  port  in  a  possession  or 
dependency  of  the  United  States,  or  in  a  foreign  country,  by  a  carrier  by  water  in  foreign 
commerce,  any  lower  rate,  fare,  or  charge  than  that  charged,  collected,  or  received  by  it  for 
the  transportation  of  persons,  or  of  a  like  kind  of  property,  for  the  same  distance,  in  the 
same  direction,  and  over  the  same  route,  in  connection  with  commerce  tvholly  ivithin  the 
United  States,  unless  the  vessel  so  transporting  such  persons  or  property  is,  or  unless  it 
was  at  the  time  of  such  transportation  by  water,  documented  under  the  laws  of  the  United 
States,  and  owned  by  persons  ivho  are  citizens  of  the  United  States.  Whenever  the  board 
is  of  the  opinion,  however,  that  adequate  shipping  facilities  to  or  from  any  port  in  a  pos- 
session or  dependency  of  the  United  States  or  a  foreign  country  are  not  afforded  by  vessels 
so  documented  and  owned,  it  shall  certify  this  fact  to  the  Interstate  Commerce  Commission, 
and  the  commission  may,  by  order,  suspend  the  operation  of  the  provisions  of  this  section 
with  respect  to  the  rates,  fares,  and  charges  for  the  transportation  by  rail  of  persons  and 
property  transported  from,  or  to  be  transported,  to  such  ports,  for  such  length  of  time  and 
under  such  terms  and  conditions  as  it  may  prescribe  in  such  order,  or  in  any  order  supple- 
mental thereto.  Such  suspension  of  operation  of  the  provisions  of  this  section  shall  be 
terminated  by  order  of  the  commission  whenever  the  board  is  of  the  opinion  that  adequate 
shipping  facilities-by  such  vessels  to  such  ports  are  afforded  and  shall  so  certify  to  the  com- 
mission. 

Sec.  31.  That  the  word  "association,"  wherever  used  in  this  section,  means  any  asso- 
ciation, exchange,  pool,  combination,  or  other  arrangement  between  or  among  persons. 

That  the  words  "marine  insurance  companies,"  wherever  used  in  this  section,  means  any 
persons  authorized  to  write  marine  insurance  or  reinsurance  under  the  laws  of  the  United 
States  or  of  a  State,  Territory,  District,  or  possession  thereof. 

That  nothing  contained  in  the  Act  entitled  "Aii  Act  to  protect  trade  and  commerce 
against  unlawful  restraints  and  monopolies,"  approved  Jxdy  2,  1890,  or  in  the  Act  entitled 
"An  Act  to  supplement  existing  laws  against  unlawful  restraints  and  monopolies,  and 
for  other  purposes,"  approved  October  15,  1914,  or  in  any  other  antitrust  law,  shall  be 
construed  as  declaring  to  be  illegal  an  association  entered  into  by  marine  insurance  com- 
panies for  thefollowing  purposes  only:  {1)  Reinsuring  or  otherwise  distributing  or  dividing 
their  risks  on  hulls,  cargo,  or  other  interests  entering  into  our  inland,  coastwise,  or  foreign 
trade;  and  (2)  transacting  an  insurance  or  reinsurance  business  in  foreign  countries,  pro- 
vided such  association  is  not  used  in  furthering  unfair  methods  of  competition  against 
domestic  competitors,  or  is  otherwise  unfairly  restraining  trade. 

That  every  association,  in  order  to  obtain  the  benefits  of  this  section,  shall  within  thirty 
days  after  the  enactment  of  this  Act  or  after  its  creation  file  ivith  the  board  (1)  a  verified 
written  statement  setting  forth  the  names  and  location  of  its  officers,  managers,  and  members, 
and,  if  a  corporation,  a  copy  of  its  certificate  or  articles  of  incorporation  and  by-laws,  and, 
if  unincorporated,  a  copy  of  its  articles  or  contract  of  association,  and  on  the  1st  day  of 
January  of  each  year  thereafter  it  shall  make  a  like  statement  of  the  location  of  its  ojjlces 
or  places  of  business  and  the  names  and  addresses  of  all  its  officers,  managers,  and  members 
and  of  all  amendments  to  and  changes  in  its  articles  or  certificate  of  incorporation  or  in 
its  articles  or  contract  of  association;  (2)  a  true  copy,  or,  if  oral,  a  true  and  complete  memo- 
randum, of  every  agreement  or  arrangement,  or  modification  or  cancellation  thereof,  which 
may  have  been  entered  into  for  purposes  of  reinsurance  or  division  of  risks;  and  {3)  such 
information  as  the  board  may  require  as  to  its  organization,  business  conduct,  practices, 
management,  and  relation  to  other  associations  or  persons. 

Whenever  the  board  believes  that  an  association  or  any  agreement  or  arrangement  made 
or  act  done  by  such  association  is  furthering  unfair  methods  of  competition  against  donwslic 
competitors,  or  otherwise  unfairly  restrains  traile  within  the  United  Sidles,  or  any  Territory, 
District,  or  possession  thereof,  it  shall  summon  such  association,  its  officers,  managers,  and 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE.       19 

agents,  or  officers,  mnnaqer,  and  afjents  of  the  marine  insurance  companies  composing  or 
affiliated  with  the  assoriation,  and  thereafter  conduct  an  investigation  into  the  facts.  Upon 
investigation,  if  it  shall  conclude  that  the  association  or  any  act  done  kij  the  association  is 
furthering  unfair  methods  of  competition  or  is  unfairly  restraining  trade,  it  may  make  to 
t,uch  assoanion  recommendations  for  the  readjustment  of  its  b^tsiness.  Ijf  snch  association 
fails  to  comply  with  such  recommendations,  th  board  shall  refer  its  findings  and  recommeiida- 
tions  to  the  Attorney  General  of  the  United  States  for  such  action  thereon  as  he  may  deem 
■proper. 

For  the  purpose  of  enforcing  the  provisions  of  this  section  the  board  shall  have  all  the 
powers,  so  far  as  applicable,  given  to  it  in  the  "Shipping  Act,  1916." 

Sec.  S2.  Any  person  hereafter  furnishing  repairs,  supplies,  or  other  necessaries,  including 
toivage  and  the  use  of  dry  dock  or  murine  railiray,  to  any  vessel,  whether  foreign  or  domestic, 
upon  the  order  of  the  owner  of  such  vessel,  or  of  a  person  by  them  or  him  authorized,  shall 
hare  a  maritime  Hen  on  the  vessel  which  may  be  enforced  by  proceeding  in  rem,  and  it  shall 
not  be  necessary  to  allege  or  prove  that  credit  v:as  given  to  tlie  vessel;  but  such  lien,  and  all 
other  liens  hereafter  arising  out  of,  or  created  by,  any  contract,  express  or  implied,  or  for 
damages  in  the  nature  of  demurrage  not  arising  out  of  tort,  except  liens  for  wages  of  crew 
and  of  stevedores  vheyi  employed  by  the  owner,  master,  ship's  husband,  or  agent  of  said 
vessel,  general  average  and  .vdvage,  including  contract  salvage  (which  shall  be  known  as  pre- 
ferred liens  and  rank  among  themselves  as  they  now  do  under  the  maritime  law)  shall  be 
subordinate  to  the  lien  of  any  mortgage  duly  recorded  in  the  office  of  the  collector  of  customs 
and  noted  on  the  certificate  of  registry,  or  of  enrollment  and  license,  as  hereinafier  provided, 
prior  to  the  creating  of  such  lien  or  liens,  and  any  vessel  sold  under  any  such  subordinate 
lien  shall  be  sold  subject  to,  and  such  sale  shall  not  impair,  the  lien  of  any  such  prior  re- 
corded and  noted  mortgage. 

If  any  mortgaged  vessel  is  sold  under  a  decree  in  admiralty  founded  on  a  preferred  lien 
as  hereinabove  defined,  or  on  a  iparitime  tort,  s^ich  sale  shall  divest  all  liens  as  they  now  are 
divested  by  the  maritime  law  of  the  United  States  on  similar  judicial  sales,  and  the  proceeds 
derived  therefrom,  after  deducting  marshal's  fees,  poundage,  and  other  costs  taxed  by  the 
court,  shall  be  distributed  to  the  parties  and  intervenors  in  such  proceedings  in  accordance 
with  the  priorities  of  their  respective  liens  on  the  vessel. 

That  no  mortgage  on  the  whole  of  any  vessel  of  the  United  States  of  two  hundred  gross 
tons  and  upward  shall  be  valid  against  any  person  other  than  the  mortgagor,  his  or  its 
heirs,  administrators,  executors,  successors,  or  assigns,  and  persons  having  actual  notice 
thereof,  or  shall  be  subject  to  the  provisions  of  this  section,  unless  such  mortgage  is  accom- 
panied by  the  affidavits  of  the  mortgagor  and  the  mortgagee  that  it  is  made  in  good  faith 
and  without  any  design  to  hinder,  delay,  or  defraud  existing  or  future  creditors  of  the  mort- 
gagor or  lienors  of  the  mortgaged  vessel,  and  unless  it  is  recorded  and  indorsements  are 
made  upon  said  vessel's  certificates  of  registry  or  of  enrollment  and  license,  as  hereinafter 
provided.  Such  mortgage,  luhen  in  compliayice  with  this  section,  shall  constitute  a  lien 
on  the  vessel,  and  the  mortgm^e  indebtedness  shall  bear  such  rate  of  interest  as  shall  be 
agreed  by  the  parties. 

Such  mortgage  shall  not  be  given,  or  assigned,  to  anyone  other  than  a  person  who  is  a 
citizen  of  the  United  States,  without  the  consent  of  the  board. 

If  the  parties  to  any  mortgage  on  any  vessel  ofth9  United  States  shall  so  stipulate  therein, 
such  mortgage  shall  not  be  subject  to  the  provisioyis  of  this  section,  but  shall  remain  subject 
to  the  provisions  of  sections  4192,  4193,  and  4194  of  the  Revised  Statutes  of  the  United 
States. 

A  mortgage  within  the  purview  of  the  preceding  paragraphs  of  this  section  shall  be  recorded 
in  the  office  of  the  collector  of  customs  where  the  mortgaged  vessel  is  permanently  registered, 
or  enrolled  and  licensed:  Proiyided,  That  if  n  permanent  certificate  of  registry,  or  of  enroll- 
ment and  license,  has  not  been  issued  at  the  lime  of  the  execution  of  the  mortgage,  such 
mortgage  shall  be  temporarily  recorded  in  the  office  of  the  collector  of  customs  xvhere  such 
vessel  is  then  temporarily  registered,  or  enrolled  and  licensed,  and  shall  thereafter  be  rere- 
corded in  the  office  of  the  collector  of  customs  where  and  at  the  time  such  vessel  is  permanently 
registered,  or  enrolled  and  licensed.  Such  rerecording  shall  ipso  facto  discharge  the  tem- 
porary record. 

Certificates  of  partial  payments,  and  of  final  discharge,  of  the  mortgage  indebtedness, 
executed  by  the  mortgagee,  shall  be  filed  by  the  mortgagor,  and  notices  of  claims  of  liens 
on  any  mortgaged  vessels,  and  certificates  of  discharge  thereof,  may  be  filed  by  any  lienor, 
in  the  office  of  the  collector  of  customs  where  any  such  mortgage  is  of  record.  Such  afore- 
said notice  shall  set  forth  the  name  and  address  of  the  lienor,  the  date  of  creation  of  the  lien, 
the  amount  thereof,  and  briefl.y  the  nature  of  the  lien.  Said  mortgages,  certificates,  and 
notices  shall  he  acknowledged  before  a  notary  public  or  other  officer  authorized  to  take 
acknowledgment  of  deeds.  ' 

Collectors  of  customs,  in  whose  offices  any  such  mortgages  are  recorded,  shall  indorse 
upon  the  mortgaged  vessel's  certificate  of  registry,  or  of  enrollment  and  license,  a  notation 
sett  ing  forth  the  place  and  date  of  the  recording  of  such  mortgage,  the  date  of  maturity  thereof, 


20       PROMOTION  AND  MAINTENANCE  OF    THE  AMERICAN   MARINE. 

the  names  of  the  mortgagor  and  mortgagee,  the  amount  of  secured  indebtedness  stated  in  the 
mortgage,  and  the  amounts  and  dates  of  any  partial  payments  stated  in  the  recorded  certifi- 
cates thereof  :  Provided,  That  if  such  mortgage  cova's  more  than  one  vessel  or  other  property, 
said  indorsement  shall  also  state  the  amount  upon  payment  of  which  said  vessel  may  he 
discharged  from  such  mortgage. 

Said  indorsement  shall  thereafter  be  made  by  all  collectors  of  customs  upon  each  and 
ecery  certificate  of  registry,  or  of  enrollment  and  license,  whether  permanent  or  temporary, 
issued  by  them.,  under  which  said  vessel  shall  operate,  until  the  mortgage  is  fully  discharged. 
Jf  at  the  time  of  recording  the  mortgage  or  any  certificates  of  partial  payvunts  or  of  final 
di^scharge,  the  mortgaged  vessel  is  not  in  a  port  of  the  United  States,  or  is  in  a  port  of  the 
United  States  without  the  district  in  which  such  instruments  are  recorded,  then  the  collector 
of  customs  recording  such  instruments  shall,  upon  request  of  the  mortgagor  or  the  mortagagee, 
or  his  or  their  assigns,  notify,  in  writing  or  by  telegram,  the  collector  of  cu^tov^s  for  the 
district  in  which  said  vessel  is  the^i  situated,  or,  if  said  vessel  is  not  then  in  a  United  States 
port,  ihe  collector  of  customs  for  the  district  in  which  said  vessel  thereafter  first  enters,  of  the 
recording  of  such  mortgage  and  of  any  cei'tificates  of  partial  payment,  or  of  final  discharge, 
and  of  ihe  facts  necessary  to  make  the  aforesaid  indorsements,  and  upon  receipt  of  such 
advices  it  shall  be  the  duty  of  the  collector  of  customs  so  notified  forthwith  to  indorse  such 
notations  upon  the  vessel's  certificate  of  registry,  or  of  enrollment  and  license.  N^o  clear- 
ance shall  be  granted  any  mortgaged  vessel  unless  such  certificate  bears  such  indorsement. 
The  collector  of  customs  recording  such  mortgage  shall  certify  to  and  deliver  one  or  more 
copies  thereof  to  the  mortgagor,  tcho  shall  place  and  tise  due  diligence  to  retain  one  copy  on 
board  such  mortgaged  vessel,  and  shall  also  use  such  diligmce  to  cause  such  copy  and  the 
certificate  of  registry,  or  of  enrollment  and  license,  to  be  exhibited  by  the  master  to  any  person 
having  business  with  sucJi  vessel,  or  the  oivner  thereof,  which  may  give  rise  to  a  maritime  lien 
thereon . 

Collectors  of  customs  shall  record  all  such  aforesaid  instruments,  and  the  fact  and  date 
of  the  indorsement  of  any  notation  on  certificates  of  registry,  or  of  enrollment  and  license, 
in  books  kept  for  that  pier  pose,  which  shall  be  indexed  to  show  the  name  of  the  mortgaged 
'vessel,  the  names  of  the  parties  to  any  such  instrument,  and  the  time  of  filing  for  record, 
and  shall  certify  to  the  status  of  the  mortgage  record  at  any  tiine  upon  the  request  of  any 
person. 

Collectors  of  customs  shall  receive  for  recording  any  instrument,  or  taking  any  acknorvledg- 
ment,  or  giving  any  notice,  or  furnishing  any  certificate  required  by  this  section,  a  fee  of 
fl;  and  for  furnishing  a  certified  copy  of  any  recorded  mortgage  or  of  any  certificate  of 
partial  payment,  or  of  final  discharge,  or  of  any  notice  of  claim  of  lien,  or  certificate  of 
discharge  thereof,  a  fee  of  ^2;  and  shall  be  paid  the  co.'st  of  any  telegram  sent  to  other  collectors. 

The  mortgagor  shall  disclose  to  the  mortgagee  in  writing,  prior  to  the  execution  of  any 
mortgage,  the  existence  of  any  obligation  or  liability  constituting  a  lien  on  the  vessel  to 
be  mortqaqed  then  known  to  such  mortgagor,  and  shall  not  incur-  any  contractual  obliga- 
tion creating  a  lien  upon  the  vessel  without  the  consent  of  the  mortgagee,  other  than  for 
crews'  and  stevedores'  ivages  when  incurred  as  hereinafter  provided,  general  average  and 
salvage,  including  contract  salvage,  after  the  execution  of  any  such  mortgage  and  before 
the  mortgagee  shall  have  had  a  reasonable  time  to  record  the  mortgage  and  to  have  the  nota- 
tion hereinbefore  provided  for  indorsed  upon  the  certificate  of  registry,  or  of  enrollment 
and  license.  The  mortgagor,  and  if  the  mortgagor  be  a  corporation,  the  president,  or  other 
principal  executive  officer  thereof  who  willfully  violates  any  provision  of  this  section  shall 
be  guilty  of  a  misdevuanor.  and  punishable  for  each  offense  by  a  fine  not  exceeding  $1,000, 
or  by  imprisonment  not  exceeding  two  years,  or  both,  in  the  discretion  of  the  court,  and  the 
mortgage  indebtedness  shall  thereupon  immediately  become  due  and  payable  at  the  election 
of  the  mortgagee.  The  failure  of  the  mastei-  of  any  mortgaged  vessel  to  exhibit  the  copy  of 
any  mortgage  placed  on  board  thereof,  or  the  vesscVs  certificate  of  registry,  or  of  enrollment 
and  licen.se,  to  any  person  entitled  to  examine  the  same,  shall  render  his  license  subject  to 
suspension  or  cancellation  by  the  officers  of  the  United  States  Steamboat-Inspection  Service 
having  jurisdiction  thereof. 

Any  person  who  willjully  and  knowingly  deposes  falsely  in  the  affidavit  required  by  this 
section  to  accompany  the  mortgage  shall  be  guilty  of  perjury  and  punishable  by  a  fine  not 
exceeding  -^5,000,  or  by  imprisonment  not  exceeding  five  years,  or  both,  in  the  discretion  of 
the  court. 

If  any  person  enters  into  any  contract  with  the  owner,  master,  ship's  husband,  or  other 
agent  of  any  vessels  affected  by  such  mortgage  as  may  be  filed,  reiorded,  and  noted  as  herein 
provided,  and  suffers  pecuniary  loss,  damage,  or  injury  by  reason  of  any  failure  to  make 
the  notations  or  disrlasurcs,  or  to  communicate  the  information  required  by  this  section 
in  respect  of  such  mortgage,  or  by  reason  (f  any  misreprese ntations  concerning  the  same  or 
tlie  bona  fides  of  the  mortgage,  the  party  so  injured  may  have  and  maintain,  in  any  court 
obtaining  by  personal  service  jurisdiction  of  the  person  of  the  defendant,  an  action  to  recover 
damages  compercsatory  for  su'xl  loss,  damage   or  injury,  such  action  to  be  brought  against 


PROMOTION  AND   MAINTENANCE  OF   THE  AMERICAN  MARINE.       21 

the,  prrann  by  vhnae  act.  omisrAon,  or  negligence  suck  loss,  damage,  or  injury  was  caused. 
The  failure  of  any  collector  of  customs  to  record  any  of  the  aforesaid  instruments  filed  for 
record,  or  to  furnish  certified  copies  thereof  pur.sii  ant  to  rei/uest,  or  to  furnish  to  other  col- 
lectors of  customs  the  information,  ref/uired  to  ht  furnished  by  this  .section,  shall  constitute 
actionable  acts,  omissions,  and  negligence.  If  any  plaintiff  in  any  such  action  recover 
judgment  for  damages,  hov;ever  small,  it  shall  be  the  duty  of  the  court  entering  judgment 
to  allow  and  add  to  said  judgment  so  entered  a  reasonable  counsel  fee,  assessed  by  the  court, 
which  shall  be  a  part  of  said  judgment,  and  for  the  recovery  of  ivliicJi  ulainlill  shall  be  entitled 
to  all  the  ronedies  availahlefor  the  enforcement  e)f  any  judgment  at  laio. 

The  district  courts  of  the  United  States  are  hen  by  given  jurisdiction,  but  not  to  the  ex- 
clusion of  the  cinirts  of  the  .several  States,  Territories,  Districts,  and  possessions  ejf  the 
United  States,  of  any  such  action,  irrespective  of  the  amount  in  controversy  or  the  citizen- 
ship or  residence  of  the  parties,  whenever  the  action  is  begun  by  personal  service  on  a  de- 
fendant uithin  the  limits  of  the  district  in  which  such  action  is  brought. 

Jurisdiction  is  hereby  veste/1  in  the  district  courts  of  the  United  States  to  impose  the  penalties 
hereinbefore  provided  and  to  foreclose  any  mortgage  recorded  and  note/I  on  the  certificates  of 
registry,  or  of  enrollment  and  license,  as  hereinbefore  provided,  upon  the  maturity  of  any  such 
mortgage  or  defau  It  in  am/  of  the  terms  or  conditions  thereof.  Siiitfor  suchforeclosure  may  be 
commenced  and  maintained  in  a  proceeding  in  equity  in  which  the  mortgaged  vessel  itself 
shall  be  named  as  the  defendant  in  any  district  court  of  the  Unit&l  States  in  which  the  vessel 
is  situated  by  atlwhing  the  vessel  and  by  such  pitblication  of  process  of  such  district  court, 
with  citidion  to  all  the  trorld,  as  the  court  .shall  order.  Notice  of  the  pendency  of  such  suit 
shall  also  be  given  by  serving  a  copy  of  said  citation  upon  the  master  or  other  ranking 
officer  or  careial'er  of  the  vessel,  and  also  on  the  mortgagor  or  owner,  and  all  lienors  who 
shall  have  recorded,  ami  not  discharged  of  record,  any  notices  of  claims  of  liens,  as  heretofore 
provided,  wherever  they  may  bej'ound  uithin  the  United  States,  unless  after  search  expressly 
found  by  the  court  to  have  been  made  diligently  and  satisfactorily  by  the  plaintiff  they  can 
not  be  located  therein.  All  persons  having  any  liens  on  the  mortgaged  vessel  must  proceed 
upon  the  same  in  such  suit,  unless  the  vessel  be  released  as  hereinafter  provided  prior  to 
intervention  therefor,  and  shall  be  forever  barred  from  thereafter  proceeding  thereon  against 
such  vessel. 

In  any  such  suit  the  court  may  appoint  a  receiver  and,  in  its  discretion,  authorize  his 
operation  of  the  mortgaged  vessel.  Such  receiver  may  be  empowered  and  directed  to  take, 
seize,  and  possess  himself  of  said  vessel,  notwithstaiuling  that  it  is  at  the  time  in  the  posses- 
sion or  under  the  control  of  a  person  claiming  a  2)o,ssessory  or  common-lav:  lien,  and  such 
lien  is  hereby  specifically  subordinated  to  the  lien  of  any  prior  mortgage  recorded  and  noted 
in  compliance  ivilh  this  section. 

The  mortgaged  vessel  shall  be  released  on  claim  by  the  owner  from  said  attachment, 
and  thereby  freed  from  the  lien  of  the  mortgage,  and  from  any  other  liens  for  xckich  inter- 
vention shall  have  been  made  prior  to  such  release,  but  not  otherwise,  if  the  amounts  of 
the  mortgagee's  and  intervenor's  claims,  ivith  interest  and  costs  already  accrued,  are  paid 
into  court,  or,  if  an  approved  stipidation,  with  surety,  be  fded  tvith  the  court,  in  such  form 
and  amount  as  the  court  shall  direct,  for  the  payment  of  such  final  decrees  xvith  interest 
and  costs,  as  may  be  made  by  the  court,  or  by  the  appellate  court,  if  an  appeal  intervenes. 

IJ  ihe  mortgaged  vessel  is  not  released  as  provided  m  the  preceding  paragraph,  the  court, 
on  sati.'<factory  proof  that  the  vessel  is  in  danger  of  lo.ss  or  depreciation,  may,  and  on  entry 
of  a  decree  of  foreclosure  against  the  defendant  vessel  shall,  cause  the  vessel  to  be  sold  by 
tJie  United  States  marshal  for  the  district  in  which  such  suit  is  brought  under  a  writ  of 
venditioni  exponas,  after  such  notice  thereof  as  the  court  shall  order,  to  any  person  who 
is  a  citizen  of  the  United  States,  to  answer  any  judgment  that  has  been  or  may  be  entered 
in  such  suit.  On  confirmation  by  the  court  of  any  such  sale  all  liens  on  the  vessel  shall 
terminate  and  shall  thereafter  attach  only  to  the  proceeds  derived  from  such  sale  in  accord- 
ance with  the  respective  priorities  which  the  liens  had  or  the  vessel,  and  the  purchaser  of 
the  vessel  shall  acquire  indefeasible  title  thereto,  free  and  clear  of  all  liens,  as  against  all 
the  v)orld:  and  the  said  United  States  marshal  making  such  sale,  or  his  duly  qualijied  suc- 
cessor, shall,  on  order  by  the  court,  execute  a  good  and  suffcient  bill  of  sale  to  said  property, 
vesting  such  title  thereto  in  the  purchaser.  The  proceeds  derived  from  such  sale,  after  de- 
duction of  expenses  alloived  ana  costs  tared  by  the  court,  shall  be  applied  to  the  payment 
of  such  judgment  as  may  be  entered  in  such  suit  and  of  any  other  liens  on  the  mortgaged 
vessel  for  which  intervention  shall  have  been  made,  all  in  accordance  with  their  respective 
priorities:  and  the  residue,  if  any,  shall  be  paid  to  the  mortgagor  or  the  owner,  or  other 
parties  intervening,  his  or  their  heirs,  executors,  administrators,  successors,  or  assigns,  as 
their  interests  sluill  appear. 

Proceedings  in  foreclosure  under  this  section  shall  conform  as  nearly  as  may  be  to  pro- 
ceedings in  rem  in  admiralty. 

The  mortgagee  may  join  (he  mortgagor  as  a  party  defendant  in  such  suit  by  serving  the 
mortgagor  personally  with  process  of  such  district  court  wherever  the  mortgagor  may  be 
found  within  the   United  States,  and  if  so  prayed,  judgment  against  the  mortgagor  may 


22       PROMOTION  ANn  MAINTENANCE  OF   THE  AMERICAN   MARINE. 

also  be  entered  in  such  suit  for  the  amount  of  the  mortgage  indebtedness,  or  for  any  deficiency 
in  the  full  payment  of  the  mortgage  indebtedness  remaining  unpaid  after  the  application 
thereto  of  all  or  any  of  the  proceeds  derived  from  the  sale  of  the  mortgaged  vessel  as  herein- 
before jrrovided. 

Nothing  contained  in  this  section  shall  be  construed  to  prejudice  the  mortgagee  from  pro- 
ceedings in  personam  against  the  mortgagor  in  any  other  court  for  said  mortgage  indebted- 
ness or  for  any  deficiency  in  the  full  payment  thereof. 

If  the  mortgaged  vessel  is  not  idthin  the  United  States  at  the  time  the  right  to  foreclose 
the  mortgage  lien  accrues,  the  mortgagee  inay  mmntain  an  action  in  personam  for  the 
mortgage  indebtedness  against  the  mortgagor  in  the  district  court  of  the  United  States 
uithin  the  jurisdication  of  uhich  the  viortgagor  resides,  by  serving  process  of  such  court 
personally  upon  the  mortgagor  wherever  found  uithin  the  United  States.  In  such  suit 
the  mortgagee  shall  have  the  right  to  have  the  validity  of  the  mortgage  lien  on  the  mortgaged 
vessel  adjudicated. 

Nothing  contained  in  this  section  shall  be  deemed  to  change  the  priority  fixed  by  the  viari- 
time  law  of  the  United  States  as  between  preferred  liens  and  liens  arising  from  maritime 
torts. 

ThefoUoidng  persons  shall  be  presumed  to  have  authority  from  the  oumer  or  ovmers  to 
procure  repairs,  supplies,  and  other  necessaries  for  the  vessel:  The  managing  owner,  ship's 
husband,  master,  or  any  person  to  whom  the  management  of  the  vessel  at  the  port  of  supply 
is  intrusted.  No  person  tortiously  or  unlaicfully  in  possession  or  charge  of  a  vessel  shall 
have  authority  to  bind  the  vessel. 

The  officers  and  agents  of  a  vessel  specified  in  the  preceding  paragraph  of  this  section 
shall  be  taken  to  include  such  officers  and  agents  ichen  appointed  by  a  charterer,  by  an  oumer 
pro  hac  vice,  or  by  an  agreed  purchaser  in  possession  of  the  vessel,  but  nothing  in  this  sec- 
tion shall  be  construed  to  confer  a  lien  when  the  furnisher  knew,  or  by  exercise  of  reasonable 
diligence  could  have  ascertained,  that  because  of  the  terms  of  a  charter  party,  agreement  for 
sale  of  the  vessel,  or  for  any  other  reason,  the  person  ordering  the  repairs,  supplies,  or  other 
necessaries  was  without  authority  to  bind  the  vessel  therefor. 

This  section  shall  supersede  the  provisions  of  all  State  statutes  conferring  liens  on  ves- 
sels, in  so  far  as  the  same  purport  to  create  rights  of  action  to  be  enforced  by  proceedings  in 
rem  against  vessels  for  repairs,  supplies,  and  other  necessaries. 

The  lien  of  any  mortgage  may  be  waived,  or  subordinated  to  any  other  lien,  by  the  mort- 
gagee, or  by  any  trustee  under  the  mortgage  tf,  and  to  the  amount,  authorized  by  the  mortgage. 

This  section  shall  not  apply  to  any  existing  mortgage,  or  to  any  mortgage  hereafter  placed 
on  any  vessel  now  under  an  existing  mortgage,  unless  and  until  the  mortgagor  and  mortgagee 
of  any  such  existing  mortgage  mutually  agree  in  writing  to  be  bound  by  the  provisions 
hereof  and  comply  therewith. 

As  used  in  this  section,  the  word  "mortgagee"  shall  include  a  trustee  under  any  mortgage 
subject  to  the  provisions  of  this  section. 

The  Secretary  of  Commerce  is  hereby  authorized  and  directed  to  furnish  collectors  of 
customs  with  all  necessary  books  and  records,  and  with  certificates  of  registry  and  of  enroll- 
ment and  license  in  such  form  as  shall  provide  for  the  making  of  the  hereinbefore  required 
indorsements  on  the  back  thereof. 

The  Act  entitled  "An  Act  relating  to  liens  on  vessels  for  repairs,  supplies,  or  other  nec- 
essaries," approved  June  23,  1910,  and  all  other  Acts  or  parts  of  Acts  are  hereby  repealed 
80  far  as  they  are  inconsistent  with  the  provisions  of  this  section. 

Sec.  .33.  Tliat  section  4530  of  the  Revised  Statutes  of  the  United  States  is  amended  to 
read  asfolloivs: 

"Sec.  4-530.  Every  seaman  on  a  vessel  of  the  United  States  shall  be  entitled  to  receive 
on  demand  from  the  master  of  the  vessel  to  which  he  belongs  one-half  part  of  the  balance  of 
his  wages  earned  and  remaining  unpaid  at  the  time  when  such  demand  is  made  at  every  port 
where  such  vessel,  after  the  voyage  has  been  commenced,  shall  load  or  deliver  cargo  or  take 
in  fuel  before  the  voyage  is  ended,  and  all  stipulations  in  the  contract  to  the  contrary  shall 
he  void:  Provided,  Such  a  demand  shall  not  he  made  before  the  expiration  of,  nor  oftcner 
than  once  in,  five  days  nor  more  than  once  in  the  same  harbor  on  the  same  entry.  Any 
failure  on  the  part  of  the  master  to  comply  with  this  deniand  shall  release  the  seaman  from 
his  contract  and  he  shall  be  entitled  to  full  payment  of  ivages  earned.  And  ivhen  the  voyage 
is  ended  every  such  seaman  shall  be  entitled  to  the  remainder  of  the  inigcs  which  shall  be 
then  due  him.  as  provided  in  .tection  45^9  of  the  Revised  Statutes:  Provided  further,  That 
notwithstnndirig  any  release  signed  by  any  seaman  under  section  455i  of  the  Revised  Statutes 
any  court  having  jurisdiction  may  upon  good  cause  shouii  set  aside  such  release  and  take 
such  action  as  justice  shall  require:  And  provided  further,  That  this  section  shall  apply  to 
seamen  on  foreign  vessels  irhile  in,  harbors  of  the  United  States,  and  the  courts  of  the  United 
Stfiles  shall  he  open  to  .such  seamen  for  its  enforcement.  " 

Sec.  34.  That  paragraph  (a)  of  section  11  of  the  Act  entitled  "An  Act  to  remove  certain 
burdens  on  the  American  merchant  mxirine  and  encourage  the  American  foreign  carrying 
trade,  and  for  other  purposes,"  approved  June  26,  1834,  as  amended,  is  hereby  amended 
to  read  as  follows: 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN  MARINE.       23 

"Sec.  10.  (a)  That  it  shall  be,  and  is  hereby,  made  nnlairful  in  any  case  to  pay  any 
seaman  waqes  in  advance  nj  the  time  when  he  has  actually  earned  the  same,  or  to  pay  such 
arlvdvce  ica(/es,  or  to  make  any  order,  or  note,  or  other  evidence  cjf  indebtedness  therefor  to 
any  oilier  person,  or  to  pay  any  person,  for  the  shipment  of  seamen  vhen  payment  is  deducted 
or  to  be  deducted  from  a  seaman's  waqes.  Any  person  violating  any  of  the  foreyoing  pro- 
visions of  this  section  shall  be  deemed  miilty  of  a  misdemeanor,  and  upon  conviction  shall 
be  pnnishc/  by  a  fine  of  nut  Ic.t.s  tiuin  ^J5  nor  more  than  $100,  and  may  also  be  imprison&l 
for  a  period  of  not  exceeding  six  months,  at  the  discretion  of  the  co-urt.  The  piayment  of 
such  advance  wages  or  allotment,  whether  made  within  or  without  the  United  Stoics  or 
territory  subicct  to  the  jurisdiction  thereof,  shall  in  no  cose  except  as  herein  provideil  rdisolve 
the  vessel  or  the  master  or  the  owner  thereof  from  the  full  payment  of  wages  after  the  same 
shall  have  been  acliudly  earned,  and  shall  be  no  defense  to  a  libel  suit  or  action  for  the 
recovery  of  such  wages.  Jf  any  person  shall  demand  or  receive,  either  directly  or  indirccily, 
from,  any  seaman  or  other  person  seeking  employment,  as  seaman,  or  from  any  person  on 
his  behalf,  any  remuneration  whatever  for  providing  him  with  employment,  he  shall  for 
every  such  offense  be  deemed  guilty  of  a  misdemeanor  and  shall  be  imprisoned  not  more 
than  s/.r  months  or  fined  not  more  than  $500.^' 

Sec.  .35.  That  the  second  proviso  of  the  first  paragraph  of  section  IS  of  the  Act  entitled 
"An  Act  to  promote  the  welfare  of  American  seamen  in  the  merchant  marine  of  the  United 
Slates,  to  abolish  arrest  and  imprisonment  as  a  penalty  for  desertion  and  to  secure  the 
ahrogalion  of  treaty  provisions  in  relation  thereto,  and  to  promote  safety  at  sea,'^  approved 
March  4,  191f>,  is  amended  to  read  asfolloujsi 

"  Provided  further,  That  upon  examination  under  rules  prescribed  by  the  Department  of 
Commerce  as  to  eyesight,  hearing,  physical  condition,  and  knowledge  of  the  duties  of  sea- 
manship, a  citizen  of  the  United  States  found  competent  may  be  rated  as  able  seaman 
after  having  served  on  deck  twelve  months  at  sea  or  on  the  Great  Lakes;  but  seamen  exam- 
ined and  rated  able  seamen  under  this  proviso  shall  not  in  any  case  compose  more  than 
one-fourth  of  the  number  of  able  seamen  required  by  this  section  to  be  shipped  or  emjdoyed 
upon  any  vessel  except  that  any  American  citizen  rated  as  able  seaman  under  this  proviso, 
who  has  served  one  year  at  sea  or  on  the  Great  Lakes  after  securing  such  rating,  shall  not 
be  included  as  composing  a  part  of  the  one-fourth  of  such  able  seamen  under  this  proviso.^' 

Sec.  36.  That  section  20  of  such  Act  of  March  4,  1915,  be,  and  is,  amended  to  read  as 
follows: 

"Sec.  20.  That  any  seaman  who  shall  suffer  personal  injury  in  the  course  of  his  em- 
ployment may,  at  his  election,  maintain  an  action  for  damages  at  law,  with  the  right  of 
trial  by  jury,  and  in  such  action  all  statutes  of  the  United  States  modifying  or  extending 
the  cominon-law  right  or  remedy  in  cases  of  personal  injury  to  railway  employees  shall 
apply;  and  in  case  of  the  death  of  any  seaman  as  a  result  of  any  such  personal  injury  the 
personal  representative  of  such  seaman  may  maintain  an  action  for  damages  at  law  with 
the  right  of  trial  by  jury,  and  in  such  action  all  statutes  of  the  United  States  conferring  or 
regulating  the  right  of  action  for  death  in  the  case  of  railway  employees  shall  be  applicable." 

Sec.  37.  That  in  the  judgment  of  Congress,  articles  or  provisions  in  treaties  or  con- 
ventions to  which  the  United  States  is  a  party,  tchich  restrict  the  right  of  the  United  States 
to  impose  disiriminating  customs  duties  on  imports  entering  tlie  United  States  in  foreign 
vessels  and  in  vessels  of  the  United  States,  and  ichich  also  restrict  the  right  of  the  United 
States  to  impose  discriminatory  tonnage  dues  on  foreign  vessels  and  on  vessels  of  the  United 
States  entering  the  United  States  should  be  terminated,  and  the  President  is  hereby  author- 
ized arid  directed  within  ninety  days  after  this  Act  becomes  laiv  to  give  notice  to  the  several 
Governments,  respectively,  parties  to  such  treaties  or  conventions,  that  so  much  thereof 
as  imposes  any  such  restriction  on  the  United  States  will  terminate  on  the  expiration  of 
such  periods  as  may  be  required  for  the  giving  of  such  notice  by  the  provisions  of  such 
treaties  or  conventions. 

Sec.  i3  3S.  That  tlie  power  and  authority  vested  in  the  board  by  this  Act,  except 
as  herein  othervrise  provided,  may  be  exercised  directly  by  the  board,  or  by  it  through 
the  United  States  Shi])|)inff  Board  Emergency  Fleet  Corporation  or  other  agcncico 

tPcftt'^tl  pllrSlrtiiii.  t'O"  ilvl  I  HOI  1 1\'   01  ItiW . 

Sec.  8d  39.  That  if  any  provision  of  this  Act  is  declared  unconstitutional  or  the  appli- 
cation of  any  provision  to  certain  circumstances  be  held  invalid,  the  remainder  of  Uie  Act 
ami  the  application  of  such  provisions  to  circumstances  other  than  those  as  to  which  it  is 
held  invalid  shall  not  be  affected  thereby. 

Sec.  36  40.  That  when  used  in  this  Act,  unless  the  sontext  othericise  requires,  the 
terms  "person,"  "vessel,"  "  documented  under  the  laws  of  the  Uriited  States,"  and  "citizen 
of  the  United  States"'  shall  have  the  meaning  assigned  to  them  by  sections  1  and  2  of  the 
"Shipping  Act,  1916,"  as  amended  by  this  Act. 

Sec.  41-   That  section  2  of  the  "Shipping  Act,  1916,"  is  amended  to  read  asfolloivs: 

"Sec.  2.  That  within  the  meaning  of  this  Act  no  corporation,  partnership,  or  associa- 
tion shall  be  deemed  a  citizen  of  the  United  States  unless  all  the  stock  and  securities  of  such 
corporation,  partnership,  or  association  are  at  all  times  wholly  and  bona  fide  owned  by 


24       PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN   MARINE. 


citizens  of  the  United  States,  and,  in  the  case  of  a  corporation,  unless  in  addition  to  such 
requirement,  its  president  and  directors  are  citizens  of  the  United  States,  and  the  corpora- 
tion itself  is  organized  under  the  laws  of  the  United  States,  or  of  a  State,  Territory,  District, 
or  possession  thereof. 

A  corporation  shall  not  be  deemed  to  be  so  oivned  by  citizens  of  the  United  States  (a)  if 
the  title  to  all  of  its  stock  and  other  securities  is  not  vested  in  such  citizens,  free  from  any 
trust  or  fiduciary  obligation  in  favor  of  any  person  not  a  citizen  of  the  United  States;  or 
(b)  if  all  the  voting  power  in  such  corporation  is  not  vested  in  citizens  of  the  United  States; 
or{c)  if,  through  any  contract  or  understanding,  it  is  so  arranged  that  voting  power  in  such 
corporation  may  be  exercised,  directly  or  indirectly,  in  behalf  of  any  person  who  is  not  a 
citizen  of  the  United  States;  or  {d)  if  by  any  other  means  u^hatsoever  control  of  any  interest 
in  the  corporation  is  conferred  upon  or  permitted  to  be  exercised  by  any  person  who  is  not 
a  citizen  of  the  United  States:  Provided,  That  for  the  purpose  of  operating  vesseb  exclu- 
sively in  foreign  commerce  a  corporation,  partnership,  or  association  organized  and  offi- 
cered as  provided  in  this  section  shall  be  deemed  a  citizen  of  the  United  States  if  at  least  75 
per  centum  of  its  stock  and  other  securities  are  at  all  times  bona  fide  owned  by  citizens  of 
the  United  States,  free  from  any  trust  or  fiduciary  obligation  in  favor  of  any  person  not  a 
citizen  of  the  United  Stales." 

Sec.  iS  42.  That  this  Act  may  be  cited  as  the  Merchant  Marine  Act,  i9i&  1920. 

Passed  the  House  ot  Representatives  November  8,  1919. 

Attest:  Wm.  Tyler   Page,  Clerk. 

The  follomng  are  statements  and  tables  submitted  by  Judge  John 
Barton  Payne  and  excerpts  from  his  testimony  before  the  Committee 
on  Commerce  when  he  was  chairman  of  the  Shipping  Board: 

ORIGINAL  CONSTRUCTION   PROGRAM. 

Ships  placed  by  contracts  and  requisitioned  by  Emergency  Fleet  Corporation. 


Original  program. 

Canceled. 

Active. 

Class. 

Number. 

Dead- 
weight 
tons. 

Number. 

Dead- 
weight 
tons. 

Number. 

Dead- 
weight 
tons. 

419 

1,727 

1,017 

50 

43 

2,963,406 
11,756,920 

3,052,200 
175,000 
302,000 

35 
422 
425 
32 
31 

276, 140 

2,884,475 

1, 155, 700 

122,000 

228,500 

384 
1, 305 

592 
18 
12 

2,687,266 

8,872,445 

1,896,500 

63,000 

73,500 

Total 

3,  250 

18,249,526 

945 

4,656,815 

2,311 

13,592,711 

Program  analyzed. 

Dead-weight 

tons. 

Delivered 10, 064,  477 

Being  outfitted 1,  204,  826 

On  ways 3,916,608 

Keels  not  laid 406,  800 


Total 33,  592,  711 

Analysis  of  active  program,  2,311  vessels  of  13,592,711  dead-weight  tons. 

Dead- 
weight 
ton.s. 


Vessels  sold 

Wooden  vessels 

Wooden  hulls,  no  machinery. 

tileel  delivered 

Bteel  yet  to  come 

Wood  yet  to  come 

Concrete  yet  to  como 


13,594,811 
2,100 


Net 13,592,711 


Total 

Deduct  difTerence  between  contract  tonnage  and  actual . 


1,134,586 

1,060,660 

808,000 

7,063,335 

3,381,030 

87,200 

60,000 


PROMOTION  AND  MAINTENANCE  OF   THE  AMERICAN   MARINE.       25 

Steel  vessels  on  hand  and  to  he  constructed  by  Emergency  Fleet  Cor-poration. 


Class. 


Steel 
Steel 
Steel 
Steel 
Steel 
Steel 
Steel 


eargo 

tankers 

refiif.'erator 

transports 

iiassenger  and  cargo. 

liari;es 

tugs 

Total 


Vessels  on  hand. 


Number. 


1,018 

48 
10 


34 


Dead- 
weight 
tons. 


Vessels  to  be 
constructed. 


Number. 


6,478,850 

438,445 
117,090 


Dead- 
weight 
tons. 


297 
52 

1 

12 
20 

5 
11 


2,221, 

498, 

y, 

90, 
33S, 
20, 


1.119       7,049,935 


404       3,183,504 


Total. 


Number. 


1,315 
100 
17 
12 
29 
5 
45 


1,523 


Dead- 
weight 
tons. 


8,699,939 
937, 120 
127,090 

96,000 
352,950 

20,400 


10,233,499 


Oil  burners  in  active  program  as  of  Feb.  10,  1920. 


Percent. 

Dead- 
weight 
tons. 

Oil,  dead- 
weight 
tons 

Delivered: 

Oil 

30 
33 
25 

3,023,212 
3,925,140 
2.  .Mli  120 

3,023,212 

Coal 

Coal  and  oil 

Building: 

Oil 

47  1     1,407,034 
13           4n.->.7^i 

1,407,034 

Coal 

Coal  and  oil 

40 

63 
37 

1,248,574 

200,285 
149,515 

Number  keels  laid: 

Oil 

206,285 

Coal  and  oil 

Analysis  of  all  vessels  owned  and  operated  by  the  United  Stales  Shipping  Board. 


Steel  cargo 

Wood  cargo 

Steel  tankers 

Wood  tanker 

Steel  refrigerators . 
Steel  passengers... 
Steel  tugs 


,046 
276 
48 
1 
16 
39 
34 


Wood  tugs 

Steel  barges 

Wood  barges.. . 
Concrete  cargo. 

Total.... 


34 
10 

14 
4 


1,523 


Built  owned  steel  cargo  vessels  by  sizes. 


Cargo. 

Refrigerators. 

Tankers. 

Total. 

Num- 
ber. 

Dead- 
weight 
tons. 

Num- 
ber. 

Dead- 
weight 
tons. 

Num- 
ber. 

Dead- 
weight 
tons. 

Num- 
ber. 

Dead- 
weight 
tons. 

2,999  dead-  weight  tons  and  under. 
3,000  to  3,999  dea<l- weight  tons 

44 

189 
186 
118 
13 
125 

121,633 
701,307 

706, 898 

040,940 

82, 803 

999. 823 

44 
189 
187 
122 

18 
133 
228 
124 

65 

121  633 

1 

701  367 

4,000  to  4,999  dead-weight  tons 

5,000  to  5,999  dead- weight  tons 

6,000  to  6,999  dead-weiglit  toas 

7,000  to  7,999  dead-weight  tons 

i          4,800 

771  698 

4         2i,034 
3  !      18,282 

602, 574 

114,082 

1,057  524 

2 
8 
5 
9 
23 

12,997 
57, 701 
44,895 
82,037 
236,015 

8,000  to  8,999  dead-weight  tons 

9,000  to  9,999  dead-weight  tons 

10,000  dead-weight  tons  and  over. . 

217  11,825,253 
112  '1,055,700 
42       481,977 

6  !      49,574 
3  1      28,200 

1,919,722 

1,160,511 

717,992 

Total 

1,046    0.070.908 

16       117.090 

48       4.38. 44.=; 

1,110 

7, 233, 103 

' 

451667 


26     pro:motion  axd  maintenance  of  the  American  marine. 

Mr.  Payxe.  Financial.  Total  appropriations  by  Congress,  $3,181,451,000;  total 
other  receipts,  $244,840,726.75:  total  appropriations  and  receipts,  $3,426,291,726.75; 
total  expenditures,  $3,137,311,816.61;  total  available  balance  to  date,  January  31, 
1919,  $288,979,910.14. 

Estimated  available  fimds  from  January  1  to  June  30,  1920,  not  including  money 
due  from  the  Armv  but  including  the  above  balance,  operations,  sales  of  ships,  and 
sales  of  supplies,  $372,000,000. 

Estimate  disbursements  for  same  period,  not  including  cost  of  reconstruction  of 
ex-German  ships,  $307,000,000. 

Estimated  balance  June  30,  1920,  $65,000,000. 

The  Chairm.a-n.  That  table  may  go  in  the  record  at  this  point. 

(The  table  referred  to  is  as  foUoWs:) 

Consolidated  statement  of  construction  appropriations,  receipts,  and  expenditures  as  at 

Jan.  31,  1920. 

Total  appropriations $3, 181, 451, 000.  00 

Total  receipts 244,  840,  726.  75 

Total  appropriations  and  receipts: 3, 426,  291,  726.  75 

Total  expenditures 3, 137,  311,  816.  61 

Total  available  balance  to  date 288,  979,  910. 14 

Estimated  available  funds  from  Jan.  1  to  June  30,  1920,  not  in- 
cluding money  due  from  Army  but  including  above  balance, 
operations,  sales  of  ships,  and  sales  of  supplies 372, 000, 000.  00 

Estimated  disbursements  for  same  period,  not  including  cost  of 
reconstruction  of  ex-German  ships 307, 000, 000.  00 

Estimated  balance  June  30,  1920 65, 000, 000.  00 

Mr.  Payne.  Eesults  of  operation.  Voyage  revenues  from  operations  to  June  30, 
1919.  as  reflected  in  condensed  balance  sheet  of  June  30.  1919,  owned  and  chartered 
vessels,  $433,774,877.48;  for  requisitioned  vessels,  $140,252,279.03;  total 
$574,027,156.50. 

Senator  Fletcher.  That  is  for  what? 

Mr.  Payne.  That  is  the  total  revenue  from  operations  from  the  beginning  to  the 
30th  of  last  June. 

Senator  Fletcher.  Gross  revenues? 

Mr.  Payne.  Gross  revenues.  Operating  expenses  were  $196,843,411.53;  charter 
hire,  $150, 050, 278.86;  insurance,  $31,149,007.29;  repairs,  $29,498,463.77;  total  ex- 
penses, $407,533,161.65.     A  net  revenue  is  shown  of  $166,493,994.85. 

The  Chairman.  That  table  may  go  in  the  record  at  this  point. 

(The  table  referred  to  is  as  follows:) 

Voyage  revenues  from  operations  to  June  SO,  1919,  as  reflected  in  condensed  balance  sheet 

of  June  30,  1919. 
Income: 

Owned  and  chartered  vessels $433,  774,  877.  48 

Requisitioned  vessels 140,  252,  279.  03 

$574, 027, 156.  50 

Charges: 

Operating  expense 196,  843,  411.  73 

Charter  hire 150,  050,  278.  86 

Insurance 31,149,007.29 

Repairs 29,  490,  4G3.  77 

407,533,161.65 

Net  revenue  to  Juno  30,  1 91 9 166,  493,  994.  85 

Mr.  Payne.  Cash  receipts  and  disbursements  from  operations  to  December  31, 
1919,  six  months  more  than  the  last  one  I  jii.st  read. 

Cash  receipts  from  re(|uisitioned  vessels,  $170,124,266.39;  other  than  requisitioned 
vessels,  $409,719,406.65;  cash  in  bank,  trust  accounts,  $22,758,000;  total  receipts, 
$602,601,6.-^3.04.- 

Ca:ih  disbur.«ements,  reqiiisitioned  vessels,  $119,589,167.44;  other  than  requisi- 
tioned vessels,  $336,255,115.97;  recruiting  service,  $9,207,840.66;  total  disburse- 
menta,  $465,052,124.07;  with  a  net  cash  balance  of  $137,549,508.97. 


Illllililllllilillllll 

PROMOTION  AND   MAINTENANCE  OF   THE  AMERICAN   MARINE.       27 

The  (^HAiRMAN.  That  table  may  ^o  in  the  record  at  this  point. 
(The  paper  referred  to  is  as  follows:) 

Cash  receipts  and  disbursements  from  o-perations  to  Dec.  31,  1919. 

Cash  receipts: 

Re(.;iiLMtioiiod  vessels $170,124,220.39 

Other  tliau  re(|insitioned  vessels 409,  719.  400.  05 

Cash  in  bank,  trust  accouuts 22,  758,  000.  00 

$602,  601,  633.  04 

Cash  disbursements: 

RequLsitionea  vessels 11 9,  589, 167.  44 

Other  than  requisitioneH  vpssrIs 336,  255, 115.  97 

Recruiting  service 9,  207,  840.  06 

405,052,124.07 

Balance 137,  549,  508.  97 

No  amount  is  charged  off  for  interest,  depreciation,  or  insurance. 

The  followinj;  statement  of  total  cash  receipts  and  disbursements  in 
connection  with  operation  of  vessels  solely,  from  the  bcginninf^  of 
such  operation  to  March  31,  1920,  has  been  submitted  by  the  Shipping 
Board : 

Receipts: 

Requisition  vessels $182,  433,  428.  40 

Owned  vessels 440,  234,  042. 16 


Total  receipts 622,  667,  470.  56 

Disbursements: 

Requisition  vessels 122,  594,  271. 18 

Owned  vessels 367,  289,  418.  09 

Total  disbursements 489,  883,  689.  27 

Balance 132,  783,  781.  29 

o 


AT  I 

LOS  ANGH.es 

LIBRARY  j 


3  1158  01255  3185 


1 


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^A    000  968  061 


